Eircom has received court permission to restructure its debt worth EUR 4.08 billion, the Financial Times reported. Dublin's High Court is expected to appoint an interim examiner on 30 March for a legal process to protect Eircom's assets from creditors for up to 100 days while the company attempts to implement a restructuring plan. The examinership process follows an unsuccessful search for bidders for Eircom. The company recently warned the financial crisis was also having a detrimental impact on its core business. CEO Paul Donovan told the Financial Times the company was unable to sustain the "Celtic Tiger" debt levels that were amassed during the economic boom. He said Eircom needed EUR 1.3 billion investment over the next five years to enable it to launch new products to compete in the market. Under a restructuring plan backed by the company's management and senior lenders, Eircom will ask the High Court to write off about EUR 1.7 billion in debt and transfer ownership of the company to about 200 creditors, including Blackstone and Deutsche Bank. These senior lenders would take a 15 percent cut on their overall EUR 2.7 billion debts. Blackstone is likely to emerge as the largest single shareholder with 18 percent of Eircom if the plan is approved by an examiner. Existing shareholders Singapore-based STT and the employee Esot share trust would lose all their equity under the restructuring plan. The company had considered undergoing a pre-pack administration process in the UK as an alternative to examinership, but this could have created additional tax implications.
