Eircom shifts its corporate debt to Jersey company

7 Aug 2014

Incumbent Irish telecoms operator Eircom has moved assets and liabilities to a new operating company in Jersey ahead of a potential public listing.

Eircom said it will remain tax resident in Ireland and all management and operations of the companies will remain in Ireland.

The move, part of Eircom’s attempts to restructure, will give the company greater flexibility to pay dividends to shareholders.

“As announced on 11 April 2014, Eircom has initiated a review to explore various strategic options for the eircom Group, including a possible listing on a public market,” Eircom said in a statement.

“That review continues. In this context, the transfer of the assets and liabilities of eircom Limited (eircom’s principal operating company) to a new operating company, which would be incorporated in Jersey and tax resident in Ireland, as envisaged by the proposed reorganisation, would provide Eircom greater flexibility to pay dividends to shareholders in the future.”

Eircom said it will engage with its shareholders, bondholders and lenders regarding the potential reorganisation through formal consent solicitation processes over the coming weeks.

“This reorganisation, if implemented, will not have any impact on Eircom’s operations. Nor does Eircom expect that the reorganisation will have any impact on Eircom’s customers or business partners as Eircom’s operations will remain in Ireland.”

Eircom floated on the public markets in 1999, was made private two years later, refloated in 2004 and delisted again in 2006.

Over a period of 10 years, the company had several different owners and entered examinership in 2012.

Eircom exited examinership that same year and had 40pc of its debt written off.

The company’s options are to either seek a listing on the public markets or engage in a trade sale with an international telecoms operator.

An eye on Ireland’s digital prize

Since exiting the examinership process, the operator has made valiant efforts to be a fit-for-purpose provider of next-generation broadband services for Ireland.

Last November, Eircom increased its planned national fibre footprint from 1.2m homes and businesses to 1.4m homes and businesses across Ireland.

In March, Eircom announced it had become one of the first telecoms companies in the world to deploy VDSL2 Vectoring technology in its Next Generation Fibre Access network, boosting broadband speeds up to 100Mbps.

By July 2016, it estimates 70pc of the country across 26 counties will have access to fibre broadband speeds of up to 100Mbps.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years