Eircom seeking 1,000 redundancies
The High Court has heard today that 1,000 voluntary redundancies will be required to save eircom, and its mobile subsidiary Meteor.
Mr Justice Peter Kelly will decide tomorrow morning whether to appoint an interim examiner to the telecoms group.
Eircom has been granted court protection overnight while the judge Peter Kelly considers whether to appoint an interim examiner.
The firm and its subsidiaries, ITI and mobile operator Meteor, currently employs in excess of 5,500 people but the court heard that 1,000 jobs will have to be shed over the next five years if the group is to survive.
As part of the examinership process, secured senior creditors have agreed to a substantial writedown of the group's debts, which total €4bn.
Barrister Maurice Collins said that while the companies continue to trade in a positive way, eircom needs to roll out a fibre network and a new generation of services to customers to remain competitive.
This requires restructuring and significant new investment, but despite the conditions he has submitted that the group has a very good prospect of survival.
In a statement, eircom assured customers it was business as usual for all operations.
Three businesses – Eircom Ltd, Meteor Mobile Communications Limited and Irish Telecommunications Investments Limited – are affected by the examinership which will be ruled on tomorrow by Mr Justice Peter Kelly in the High Court.
Paul Donovan, chief executive of eircom Group, said there was no alternative to the court application.
“This is a necessary and unavoidable step on our journey to addressing the unsustainable level of debt on our balance sheet and continuing our operational transformation into a vibrant and competitive company,” he said.
“I would like to reassure all our customers, suppliers and employees that it is very much business as usual during the examinership process.”
The examinership is reported to be the largest in Irish corporate history.
Under the proposals, Eircom’s gross debts would be reduced from about €4bn to about €2.35bn.
The proposed business plan being inspected by Judge Kelly would also see a retraining and recruitment of staff for new operations.
Eircom said there would be no direct impact on employees or services to customers and staff would continue to be paid on time.
Mr Donovan announced yesterday he was planning to step down at the end of the year.
The examiner’s role is to inspect company affairs with a view to determining and recommending an appropriate proposal for Eircom as a going concern.
This proposal must in turn be approved by the High Court.
The process runs for a maximum of 100 days.
