Strong demand for telecom high-yield debt, boosted by Mannesmann's agreed bid for Orange, has allowed Esat Telecom to raise €175 million (£139 million) of debt at lower rates than had previously been expected. Esat has issued the debt on a 11.875 per cent yield, compared to the 12.012.5 yield expected earlier this week.

Esat has also raised a further €60 million after placing 3.15 million new shares at $41.25 per American Depository Share - equivalent to €19.16 for the ordinary shares traded in Dublin and on the Easdaq market in Brussels. The price for the new shares is strong and is only a $1.50 discount to the $42.75 price in the market before the placing. Esat shares subsequently closed higher, at $44.125.

Expectation of further consolidation in the telecom sector and an upgrade this week by S&P boosted demand for both Esat debt and equity, market sources said.

Esat chairman Mr Denis O'Brien said: "We are delighted by the high investor response to our offerings from existing and new investors. The proceeds raised will enable the group to further develop its data and Internet business and to specifically fund the PostGEM acquisition."