EIRCOM HAS agreed to withhold a €5.77 million coupon payment to its junior lenders following a request from its senior bondholders.

In a statement released late yesterday the telco said the payment suspension does not affect the continued operation of the group’s business. “All Eircom and Meteor services and payments to suppliers continue as normal.”

Heavily indebted Eircom has been able to avoid defaulting on its loan covenants thanks to a series of waivers granted to it by its senior lenders. One of the conditions of those waivers has been that the senior lenders were granted rights to suspend coupon payments on the company’s floating rate notes.

Eircom has four tiers of lenders, to which it owes a total of about €3.6 billion. The first lien senior lenders and second lien senior bondholders are owed about €3 billion.

The payment of €5.77 million was due on February 15th, next to third-tier floating rate note holders.

Last month Eircom’s parent, ERC Ireland Holdings, appointed Morgan Stanley to seek a buyer for the company. Assuming current shareholders do not decide to invest further, Eircom will have had six owners since it was privatised by the State in 1999.

Interested parties have until the middle of next month to express their interest.

Eircom has been struggling to restructure its massive debts since the middle of last year.

Days before Christmas its Singapore majority shareholder ST Telemedia withdrew a proposal to inject a further €200 million into the company.

Its directors subsequently resigned from the Eircom board and it remains unclear if it will engage with the current share processor.

ST Telemedia holds a 65 per cent stake in Eircom, with the employee Esot holding 35 per cent.

Denis O’Brien’s Digicel mobile phone group also looked at Eircom but subsequently withdrew from the process.

Eircom’s board has two investment proposals from its lenders. The proposal from senior lenders would see them take full control, reduce their debt and extend the maturity of their loans to 2017.