Welcome for Eircom deal clearance

bealtine

http://www.rte.ie/business/2009/1216/eircom.html


Eircom has welcomed an Australian court's approval of yesterday's vote by the shareholders of its parent company Eircom Holdings to accept a takeover by STT Communications (STTC). STTC is part of Singapore Telemedia Technologies (ST Telemedia).

Eircom CEO Paul Donovan said this week's developments were important milestones on the way to the conclusion of the deal in early January.

Mr Donovan said it was vital for Eircom to transform itself into a modern telecommunications company and contribute to the re-establishment of Ireland's international competitiveness. He said ST Telemedia would brings 'a wealth of industry knowledge, both in Singapore and abroad' to help the company to do this.

ST Telemedia also welcomed the approval, adding that it was a long-term investor and would aim to build a sustainable business. 'ST Telemedia will be working closely with the management and employees of Eircom to determine a sound vision and strategy for the future, with a strong focus on meeting customer requirements, upgrading legacy infrastructure and generating shareholder returns over the long run,' said Lee Theng Kiat, the company's president and CEO.

The takeover deal valued Eircom at €3.94 billion, but STT will also be taking on its €3.87 billion in debt. The company's ESOT - the employee share ownership trust - which owns 35% of the company has agreed to co-operate with the deal.

rob808

bealtine wrote: »

http://www.rte.ie/business/2009/1216/eircom.html


Eircom has welcomed an Australian court's approval of yesterday's vote by the shareholders of its parent company Eircom Holdings to accept a takeover by STT Communications (STTC). STTC is part of Singapore Telemedia Technologies (ST Telemedia).

Eircom CEO Paul Donovan said this week's developments were important milestones on the way to the conclusion of the deal in early January.

Mr Donovan said it was vital for Eircom to transform itself into a modern telecommunications company and contribute to the re-establishment of Ireland's international competitiveness. He said ST Telemedia would brings 'a wealth of industry knowledge, both in Singapore and abroad' to help the company to do this.

ST Telemedia also welcomed the approval, adding that it was a long-term investor and would aim to build a sustainable business. 'ST Telemedia will be working closely with the management and employees of Eircom to determine a sound vision and strategy for the future, with a strong focus on meeting customer requirements, upgrading legacy infrastructure and generating shareholder returns over the long run,' said Lee Theng Kiat, the company's president and CEO.

The takeover deal valued Eircom at €3.94 billion, but STT will also be taking on its €3.87 billion in debt. The company's ESOT - the employee share ownership trust - which owns 35% of the company has agreed to co-operate with the deal.

Eircom a looser business we never get good fast broadband from them as long as those greedy ESOT shareholders are around they don't care what our network like and future not looking good for Ireland.we have a government that doesn't want to invest in our country and a regulator that does more damage than good for broadband in Ireland .

trekkypj

Wow now there's a job I wouldn't like... saving Eircom from self immolation.

Sooooo what issues do they face?

- Massive debts of €3.9 bn.
- Major Infrastructural Rebuilding needed over the next few years - replacing copper with fibre.
- Competition from better service providers such as UPC, Digiweb et al, and from mobile providers in rural areas under the NBS (phone and 3G midband)
- Loss of market share
- Damage to reputation both from charging high line rental and inability to roll out DSL nationwide (not to mention questionable behaviour against Competitors) and small shareholders who bought into the company when it was first floated, then got burned.
- Possibility (however remote) that a National Fibre Network is built or acquired by the Government or a State Sponsored Agency, forcing eircom to spin off its network into said body.

If I was an investor, I wouldn't want to pay much for such a company either. It's a good deal for STT, they get the company for almost nothing and they can either re-negotiate the debt and rebuild the network, or else sell off the asset base and wind it down.

Whether it's a good deal for customers or for a Digital Ireland.... hard to say ATM.

Sponge Bob

STT could not be any worse than a pack of Aussie investment bankers post credit crunch. There is no evidence whatsoever that they will be any better either

bealtine

http://www.independent.ie/business/irish/new-owner-stt-warns-of-serious-challenges-facing-eircom-1978691.html



By John Mulligan

Thursday December 17 2009

Eircom faces "numerous challenges" including legacy infrastructure, a high debt burden and competition, its imminent new owner Singapore Technologies Telemedia (STT) has warned.

STT's chief executive, Theng Kiat Lee, said in a statement yesterday, regarding the A$225m (€140m) takeover of Eircom, that the Asian firm plans to be a "long-term investor" in the Irish telco.

He added that STT plans to build a "sustainable business" in Ireland.

"In the new year, ST Telemedia will be working closely with the management and employees of Eircom to determine a sound vision and strategy for the future, with a strong focus on meeting customer requirements, upgrading legacy infrastructure and generating shareholder returns over the long run," said Mr Lee.

This week, investors in Eircom Holdings (ERC), the Australian vehicle that controls 57.1pc of Eircom, voted in favour of a sale of the stake to STT, while an Australian court yesterday sanctioned the deal.

STT is expected to take control of Eircom on January 4.

Eircom has nearly €4bn in net debt, with €2.4bn of that repayable between 2014 and 2015.

Eircom's chief executive, Paul Donovan, has previously likened the company's debt burden to wearing a suit one or two sizes too small, while he has described Comreg as a "straitjacket" on Eircom.

STT said it will need the support of the Government, Comreg, Eircom's employee share ownership trust (ESOT), and Eircom management to transform the Irish firm into "an efficient operator that can contribute to the further development of Ireland's telecommunications industry".

The ESOT will continue to control 35pc of Eircom. Mr Donovan said yesterday the firm needed to evolve into a "modern telecommunications company" and that it contributes to the "re-establishment of Ireland's competitiveness".

He said that throughout the takeover process, Eircom had remained "focused on the operational challenges facing the business".

Eircom is already engaged in a rationalisation process that will aim to cut more jobs at the telco in order to reduce its operating costs.

STT is using a Cayman Islands-registered vehicle, Emerald Communications, to acquire Eircom.

Shareholders in ERC can opt for a cash payment or shares in Emerald Communications.

ERC will delist today from the Australian Stock Market.

- John Mulligan