Linklaters on board as Eircom heads for major restructure

A raft of law firms are ­lining up for the restructuring of Irish telecoms group Eircom, one of the biggest this year.

Eircom is being advised by Eugene McCague and Willie Day at Arthur Cox and Robert Elliott and Bruce Bell at Linklaters. Its financial advisers are Gleacher Shacklock and JP Morgan, and in March it also hired restructuring ­specialist Alvarez & Marsal.

Majority shareholder ­Singapore Technologies Telemedia (STT) is being advised by Ken Baird and Geoff O’Day at Freshfields Bruckhaus Beringer.

The Eircom shareholder employee trust (ESOT) is being advised by Simon Baskerville at Ashhurst.

Eircom warned in March this year of a risk of covenant breach. Its net debt was e3.75bn (£2.67bn) at the end of the last calendar year, and around e2.6bn of that debt is taken up by senior lenders.

The company is set to publish its financial results in August, and it is widely expected that at that point it will confirm that a breach has occurred and the restructuring will begin in earnest.

The past few months have seen tussles between the first and second lien lenders, with the latter originally ­agitating to take part in a joint creditors’ committee. However, despite the associated extra expense of two committees, it is understood that separate representation was accepted by the different creditors because of the ­possibility that the value will break in the senior, which could lead to intercreditor disputes.

Earlier this month Eircom officially recognised the coordinating committee representing first lien lenders, which include Alcentra, Avoca Capital, Deutsche, GSO Capital Partners, Harbourmaster Capital and SMC.

The senior creditors have brought in financial advisers Houlihan Lokey, with Kirkland & Ellis partners Kon Asimacopoulos and Partha Kar and A&L Goodbody partner David Baxter on the legal side.

The second lien lenders, which are reported to include Silverpoint, Axa, Babson, CVC Cordatus, Deutsche, GSC, Invesco and Primerica, are being advised by Allen & Overy partner Ian Field.

Floating rate note-holders are being advised by Richard Nevins of ­Cadwalader Wickersham & Taft, while the payment in kind holders are being advised by Tony Horspool of Ropes & Gray.