Examiner rejects bid for Eircom

EIRCOM’S EXAMINER has rejected a bid for the troubled telecoms group from an unnamed party.

News of the approach emerged yesterday in a statement by the company, which also revealed it has filed its statutory accounts for the year to the end of June 2011, which show it made a loss of €2.856 billion.

Eircom said its examiner, Michael McAteer, of Grant Thornton, had informed the company he received a “conditional non-binding offer” for the group.

“Given the level of the offer and its conditionality, the examiner has decided not to proceed with the proposed offer,” it said, adding that this decision was “unanimously” supported by the first lien co-ordinating committee of lenders.

Eircom has also moved to tidy up its corporate structure. ERC Luxembourg, a group company, has submitted a voluntary declaration of bankruptcy with the Luxembourg District Court.

In addition, Eircom Group Ltd and Valentia Telecommunications have each proposed special resolutions of their shareholders to wind up the companies voluntarily.

And ERC Ireland Preferred Equity Ltd, ERC Ireland Finance Ltd, and their subsidiary ERC Ireland Holdings Ltd presented a petition for liquidation to the grand court of the Cayman Islands on April 27th.

Eircom has filed accounts for the three entities that are subject to the protection of the High Court – Eircom Ltd (the main trading entity), Meteor Mobile Communications Ltd and Irish Telecommunications Ltd.

Eircom Ltd’s revenue for the main trading company fell by 8 per cent to €1,689 billion. Its earnings before interest, tax, depreciation and amortisation was 4 per cent lower at €647 million, while the company closed the year with €459 million in cash.

Eircom’s massive debt for the year was largely due to a provision of €2.5 billion relating to the level of debt that the new company will shoulder under a proposed agreement with senior lenders.

The accounts show an impairment charge of €370 million relating to Meteor.

Eircom also gave an update on the group’s defined-benefit pension scheme – the Main Superannuation Fund.

At the end of June 2011, there was an International Accounting Standard 19 surplus of €64 million. The accounting position of the fund has been remeasured as at December 31st, 2011, resulting in a deficit of €253 million.

Eircom said the actuary to the fund has confirmed that he is “reasonably satisfied” that if he were to prepare an actuarial funding certificate with an effective date of March 31st, 2012, he could certify that the plan satisfied the minimum funding standard.

“As a result, no funding proposals are required at this time,” the company added.