Representatives of Singapore’s ST Telemedia have resigned from Eircom’s board after its proposal to restructure the telecoms firm’s €3.75 billion debt was rejected by senior lenders.
A statement from Eircom said the majority of first lien lenders had rejected STT’s plans. Eircom will now go ahead with talks on a proposal from a group representing the senior lenders.
“In this context, all STT nominated directors of Eircom and the immediate holding companies have tendered their resignations with immediate effect. The main board remains otherwise unchanged with the existing Employee Share Ownership (ESOT) directors and the independent directors,” an Eircom statement said.
Eircom chairman Ned Sullivan said the announcement provided “an environment of clarity” for all parties involved to move forward.
STT, which has a 65% stake in Eircom, had withdrawn an earlier proposal because of uncertainty caused by the euro zone debt crisis. It then submitted a new proposal on December 12.
“This proposal aimed to give eircom the best opportunity to be competitive and viable over the long term as well as maintaining some financial flexibility in the current challenging environment,” STT said, adding that it was disappointed that the lenders’ group “did not engage with us at all on this second proposal”.
Eircom had breached debt arrangements with its lenders earlier this year, but has been given a waiver while talks continue on restructuring its debt.
