Eircom rings around as it weighs sale vs IPO
ADVISORS for Eircom have approached some of Europe’s largest private-equity firms as the company weighs the possibility of a sale as an alternative to returning to the stock market.
UK-based Apax Partners, CVC Capital Partners and US multinational KKR & Co are among buyout firms that have been approached to form a consortium for the Dublin-based firm.
Officials at Eircom, Apax and CVC declined to comment. KKR representatives didn’t immediately respond to emails seeking comment.
Eircom, which emerged from bankruptcy protection in 2012 after €1.8bn, or 40pc, of its debt was written off, hasn’t made any decision on its options, sources have said.
A return to the stock market is seen as helping to cut the company’s €2.2bn debt, they said.
The company would want a potential Initial Public Offering (IPO) completed before the end of the year, with a primary listing in Dublin and a secondary listing in London.
But sources have said that options remain, other than an IPO.
It is understood that discussions with private-equity firms are at an early stage.
Eircom hired investment banks Goldman Sachs and Morgan Stanley this year to explore strategic financing options for the company, including a potential IPO.
Eircom’s biggest shareholder is US investment giant Blackstone, which, following the telecom group’s examinership in 2012, now owns 25pc of the Irish company.
Other shareholders include Anchorage Capital, Bank of New York Mellon-owned Alcentra, and Silver Point Capital.
Eircom’s debt levels are currently around €2.3bn. The maturity of the debt has been extended to 2019 from 2017.
A flotation by Eircom would be one of the biggest by an Irish firm in years. Paul Coulson’s Ardagh glass group is also eyeing up a major stock market flotation next year.
There was a spike in IPO activity this year but there are signs that the appetite for flotations has been flagging.
In May, Eircom reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €119m in the third quarter – flat compared to the corresponding quarter in the previous financial year. It incurred €10m in network repair costs due to winter storms.
The company has also made a provision of €7m after watchdog Comreg said this month that it had made it too difficult for consumers to end contracts.