Eircom Group may cede a quarter of its shares to first-lien lenders in a debt restructuring at the phone company.

As part of the debt-for-equity swap proposal, senior creditors would agree to write off some of their €2.36 billion of holdings for a 15-25 per cent stake, three sources said.

Eircom, saddled with €3.75 billion of debt following five ownership changes in the last 12 years, said last month its senior lenders had agreed to waive debt terms for three months as it sought to restructure its balance sheet.

The company, owned by Singapore Technologies Telemedia and an employee trust, is pursuing more than €1.3 billion of debt writedowns across its lenders, sources say.

Holders of payment-in-kind securities, owed €643 million, bondholders due €350 million of floating-rate notes and second-lien creditors owed €350 million, will bear the brunt of burden-sharing, according to the sources. – (Bloomberg)