Shareholders in Eircom - including Sir Anthony O'Reilly, George Soros, and company employees - are to share in a €446m dividend payment, just two years after their Valentia consortium bought the company for €3 billion.
The figure emerged as Valentia announced a restructuring of a €2.4 billion loan it took on to acquire the business.
The payout will see O'Reilly receive around €20m, while Eircom's employee share ownership trust (ESOT) will receive about €165m as a dividend on its 30% shareholding.
Although Eircom had reduced its debt to €1.8 billion over the last two years, today's refinancing will bring the debt levels back up to €2.4 billion. Eircom says this is to avail of historically low interest rates, rather than to facilitate the dividend payment.
The company says it is committed to spending €1 billion on improved infrastructure over the next five years, and has a target of 100,000 Irish users of broadband by the end of 2004.
Staff numbers were reduced by 500 to 8,500 last year, and the company plans to reduce headcount to 7,500 by the end of next year.
Previously Eircom's debt was financed entirely through bank loans, but today's refinancing will see the company issue a €1 billion bond locking in an interest rate of between 8% and 9% for the next 10 years. The bank loan of €1.3 billion will incur interest charges of around 5%, over 2.5 points lower than the previous loan cost.
In results published today, Eircom showed an operating profit of €180m for last year, compared with a €51m loss in 2002. Turnover was nearly unchanged at €1.68 billion.
