Eircom bond holders approve imminent IPO plans

24 Feb 2004

More than 50pc of bondholders who own over €1.1bn of Eircom have approved Valentia’s plan for an imminent €3bn to €4bn flotation of the company on the back of a dividends incentive. It is understood that Eircom will reveal a date for its IPO this week.

As reported previously in siliconrepublic.com, Eircom’s owners Valentia embarked on a €1.1bn bond issue in conjunction with a number of major banks, including Deutsche Bank and Bank of Ireland, in August last year. It is understood Valentia had originally agreed to suspend dividends under the terms of the €1.1bn bonds issue agreement.

The approval comes less than two weeks after Valentia, which is 70pc owned by Tony O’Reilly, Providence Equity Partners and George Soros, increased the cash incentive it was offering bondholders in return for the dividend approval.

Valentia raised its proposed consent payments to as much as €20 for each €1,000 worth of bonds held, up from a maximum of €3.75 previously. The dividend resumption proposal required the support of 50pc of bondholders.

While Eircom has confirmed that it is considering an IPO, the company has not yet committed to a date for the flotation but revealed that Goldman Sachs has been appointed the lead adviser to the potential flotation. Unlike the Government-backed flotation in 1999 that valued Eircom at €8.6bn and was sold largely to Irish citizens, if Eircom floats this year it will be valued at between €3.2bn and €3.9bn and shares will be sold primarily to institutional investors.

By John Kennedy