Eircom has confirmed that its key lenders have agreed to waive its debt agreements, averting a possible default on €3.8 billion of debt.
The waiver, which lasts until December 15, "provides a necessary period of stability that allows restructuring discussions to take place during the next three months," CEO Paul Donovan said in a statement.
There are reports that lenders representing more than 90% of the debt had agreed to the waiver.
The waiver gives lenders and Eircom shareholders, including Singapore Technologies Telemedia (STT), time for talks which could lead to a debt restructuring.
Eircom faces a test each quarter to show that its ratio of earnings to debt does not fall below a particular level. The latest test was due on August 31 but the waiver overrides it.
To secure agreement from lenders, Eircom offered to pay a one-off fee of 0.5% of the senior loans, just over €13m, over three months.
