Following Independent News & Media this afternoon formally agreeing to sell its 50pc stake in Chorus Communications to Liberty Media International for an undisclosed sum, the High Court has appointed an examiner to the cable company. Chorus is understood to have debts approaching €400m.
John McStay of McStay Luby was appointed examiner to Princes Holdings Ltd and Chorus Communications upon an application by Denis McDonald.
Chorus, which has registered offices at Limerick Enterprise & Development Park, is understood to have outstanding debts of approximately €385m against an annual turnover of €65m and a customer base of 200,000 consumers.
The High Court was advised today that Chorus was confident of its future business viability following the decision by US communications company Liberty Media deciding to take a 100pc ownership of Chorus after agreeing to acquire Independent News & Media’s 50pc stake in the company.
The examiner, John McStay, explained: “Examinership has been very successful in re-establishing financial stability in a wide range of business. It is clear that Chorus has a very fine business with strong prospects, which is ideally suited to the examinership process.”
Chorus, in a statement this afternoon, said that the backing of Liberty Media reflects its long term commitment and confidence in Chorus and its Irish operations. It claimed this afternoon that significant investment has already been undertaken in infrastructure, which together with the new investment by Liberty will assure the company’s future.
Liberty Media owns interests in a broad range of electronic media, including broadband distribution, interactive technologies and services in the US, Europe, South Africa and Asia.
Chorus said that it has already undertaken a comprehensive review of its business and completed a major rationalisation programme to reduce staff numbers and overheads earlier in 2003.
It said much of the debt incurred related to initial capital investment and acquisition of other businesses and was non-recurring and cited other companies in the cable industry that had successfully restructured their debt and emerged as viable companies in the US and Europe.
Commenting on this afternoon’s news, Chorus CEO Phil Freedman said: “Chorus will continue to provide its services to customers as usual during the examinership process. There will be no disruption or alteration to the services our customers currently receive. For the future we have a strong business plan, which provides for capital investment in our networks and products which will give Chorus the opportunity to offer digital TV and broadband data services to most of the homes in Chorus service areas.”
By John Kennedy