Eircom confirms IPO plans

22 Jan 2004

Ireland’s main telecoms company Eircom has confirmed for the first time that it is definitely considering an initial public offering (IPO), but was reluctant to state when it was likely to float and on what markets.

Eircom’s decision was delivered in a technical notice released this afternoon (Thursday, 22 January) seeking the consent of its bondholders to pay a dividend in the event that it re-floats on the stock market.

In a statement the company said no decision had been taken by the Board and the timing of any floatation would depend “on market conditions and other factors.”

The announcement by Eircom comes short of a week before the company is due to stand before the Oireachtas Committee on Communications, Marine and Natural Resources to explain why it increased its line rental charges for the third time in a single year. Market watchers have added to growing speculation and have claimed that Eircom increased its rental charges in order to improve the company’s financials in advance of a potential IPO.

According to reports at the weekend, Eircom’s shareholders are understood to be planning a March flotation that would value the firm at between €3.2bn and €3.9bn. Goldman Sachs has been appointed the lead adviser on the proposed flotation, which falls significantly short of the €8.6bn valuation given to the company when it was floated on the Dublin, London and New York exchanges in 1999. It is understood that Citibank will also advise Eircom on the proposed flotation.

By John Kennedy