Eircom reassurance after court move
Debt-laden telecoms group Eircom has insisted it is business as usual after it secured court protection to rearrange its financial affairs.
Thirteen years after it was sold off in a high-profile flotation, the company has been put into examinership to try and reduce a four billion euro debt burden.
Paul Donovan, chief executive of Eircom Group, said the High Court had acknowledged the importance of the telecoms business to the state.
"It is business as usual at Eircom during the examinership process," he said. "Customers can be reassured that all voice, broadband and data services will continue. In addition, the company will honour all outstanding work and payments to suppliers. Staff will continue to be paid on time.
"We fully intend to honour our existing investment commitments, including fibre rollout to deliver high-speed broadband and TV services for Eircom customers. This network upgrade is already under way and new services should be offered later this year."
Eircom has set out a business plan which would reduce its workforce of 5,500 by about 1,000.
Three businesses - Eircom, Meteor Mobile Communications Limited and Irish Telecommunications Investments Limited - are affected by the examinership. It is reported to be the largest in Irish corporate history. Mr Justice Peter Kelly has appointed Michael McAteer of Grant Thornton chartered accountants to act as the interim examiner. A full hearing on the application will be heard on April 18.
Under the business plan proposals put before the court, Eircom's gross debts would be reduced from about four billion euro to about 2.35 billion euro. The company had been valued at about 8.4 billion euro around the time of its flotation in 1999.
Steve Fitzpatrick, general secretary of the Communications Workers' Union (CWU), said the court action had been almost inevitable. "The massive debt burden loaded up on the company through a series of cash grabs by the procession of its previous owners has meant that there was always a probability that it would ultimately need the protection of the courts to sort this mess out," he said. "This day has now arrived."
Mr Fitzpatrick said the examinership should help create a stronger company, better equipped to rebuild for the long term. The CWU is planning for negotiations with management on potential job cuts.