Eircom CEO Paul Donovan has announced he will step down from his role at the telco at the end of this year, citing personal reasons.
The company said the period will allow for the recruitment of a successor and the conclusion of the operator’s planned balance sheet restructure. Recent plans to sell the company fell through when no satisfactory bids were received.
However, ERC Holdings Ltd said it was ‘in principle supportive’ of a revised proposal submitted by first lien senior lenders that may kick start a €400m investment plan to fibre-connect 1m Irish homes in the next three to four years.
The plan still has to be formally accepted by the syndicate that owns the incumbent operator.
Donovan, a seasoned telecoms executive who is also chairman of the IBEC body Telecoms and Internet Federation (TIF), joined Eircom in 2009 as the full impact of Ireland’s financial crisis was hitting home.
Prior to joining Eircom, Donovan ran Vodafone’s global portfolio of businesses outside of Western Europe which involved 19 businesses in the US, India, China, Eastern Europe, Turkey, Australia and New Zealand.
Donovan helped to broker the deal that saw ST Telemedia (STT) acquire a controlling interest in Eircom in a €140m cash and shares deal in 2010.
During his time at Eircom, Donovan instigated an organisational restructure, as well as a €100m upgrade path for the operator’s broadband network in Ireland.
However, the company’s €3.6bn debt burden and Ireland’s ailing economy have frustrated the company’s efforts. In December, STT resigned from the Eircom board after first lien lenders rejected a proposed €200m restructure plan.
In January, Eircom’s first and second-lien lenders voted to extend a "covenant waiver" on the company’s €3.65bn debt until 31 March, enabling it to avoid liquidation.
Eircom chairman Ned Sullivan commented: "The board regrets Paul’s decision to move on from Eircom at the end of the year. Since joining the company in 2009, real progress has been made to transform the business.
“A clear strategy now underpins the group as we progress towards a sustainable future. We understand the reasons for Paul’s decision and wish him well in the future."
Donovan said: "It has been a privilege to lead Eircom. The role of CEO requires a new multi-year commitment which I am not in a position to make. In the coming months, my focus will be on ensuring that the necessary foundations are in place for a successor to lead the company into the next phase of its development."
Speaking on behalf of the First Lien Co-ordinating Committee of senior lenders, Peter Marshall, MD, Houlihan Lokey, said: "We have been informed of Paul’s decision to leave Eircom at the end of the year and we respect it. We are grateful for the leadership demonstrated by Paul and his team throughout the restructuring process."
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