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September 9, 2014

Eircom preparing for IPO?

Flotation could happen as early as next month, most likely in Dublin.

By Vinod

Ireland’s largest telecoms group is reportedly set for a record-breaking IPO which could value the company at around €3bn.

As rumoured earlier in the year, the group is preparing plans for a flotation which could happen as early as next month, sources close to the company revealed.

"A flotation is where the company is now heading. People are working towards a flotation in this [IPO] window," one person with knowledge of the situation told the Financial Times.

The move has reportedly been chosen ahead of several alternative proposals which involved selling the company to a private equity or trade buyer. Dublin would be the most likely location for any flotation, as it is where Eircom has much of its existing operations, but could also be registered in London.

An IPO would primarily allow Eircom to reduce some of its debt pile, a hangover from when the firm defaulted on its debts and filed for bankruptcy in February 2012 before being taken over by its senior lenders.

Last month, the company announced it had completed a corporate reorganisation that included the formation of operating and holding companies incorporated in Jersey and tax residency in Ireland, giving Eircom greater flexibility to pay dividends to shareholders in the future.

The deal would be Eircom’s third float since it was privatised by the Irish government in 1999, and mark its seventh change of ownership in the past 15 years, which includes spells of both public and private ownerships. The company says it has over two million customers in Ireland, including just over a million subscribers to its Meteor and eMobile mobile networks.

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Eircom has been investing significantly in improving its broadband and communications infrastructure across Ireland in recent months, with the company announcing yesterday that it had now connected one million customers to its 100MBps fibre broadband network.

 

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