Eircom expected to seek examiner

EIRCOM IS expected to petition the High Court today to enter examinership to give effect to a consensual restructuring of its debt load.

It is understood that Grant Thornton has been lined up to take on the role of examiner, subject to court approval.

Under the proposals, Eircom’s gross debts would be reduced from about €4 billion currently to about €2.35 billion.

When cash resources are taken into account, Eircom’s net debt is about €3.6 billion currently.

Voting on the restructuring proposals concluded yesterday. A majority of first-lien senior lenders were expected to give their approval to the plan, which would result in a 15 per cent haircut being applied to their €2.7 billion debt.

The maturity profile on these borrowings would also be extended to 2017.

Second-lien lenders are due to receive a €35 million payment for their €350 million debt. A significant number of these lenders opposed this deal and the possibility exists that some or all of them might seek to challenge the examinership.

Another €1 billion is owed to payment-in-kind and floating-rate note loan-note holders, who are expected to be wiped out.