GIC to buy 16% stake in Irish telco group Eir

Proposed acquisition expected to value phone carrier at over $5 billion

Sovereign wealth fund GIC has plans to buy a 16 per cent minority stake in Irish telecoms group Eir, in a deal which is expected to value the Irish company at more than €3.3 billion (S$5 billion).

The wealth fund will acquire shares worth up to €230 million at €232 apiece, according to a statement released by Eir yesterday.

Eir said in the statement that the proposed acquisition will be arranged such that "the shareholders with smaller percentage holdings will be given the opportunity to participate in the sale so as to facilitate a liquidity event for those holders".

GIC is a major global investor, with assets in more than 40 countries. It is the latest to enter the scene as a big investor in Eir, which has undergone a series of ownership changes since it was privatised as Telecom Eireann in 1999 and later became known as Eircom.

Hedge fund Anchorage Capital Group will remain the largest owner of Eir, with over 35 per cent of the group's shares, said the statement.

York Capital and Davidson Kempner are the group's two other main shareholders, with a 15 per cent and 12 per cent stake each, according to media reports.

An earlier report had indicated that the Qatar Investment Authority was on course to acquire York Capital, in addition to a number of smaller shareholdings owned by other hedge funds. "But it is the Singapore fund that has emerged as the investor," the Irish Times said.

The Eir deal would mark the second time in less than a decade that a Singapore investment fund has taken an interest in the company.

Singapore Technologies Telemedia, owned by Temasek Holdings, invested in the phone carrier in 2010 but exited its investment in 2012 at the height of the region's debt crisis after a restructuring plan was rejected by senior lenders, according to a Thursday report in the Irish Times.

Eir came out of bankruptcy protection in 2012 after creditors wrote off 40 per cent of its more than €4 billion in gross debt, accumulated during the ownership changes.

It has been planning to raise as much as €1 billion to further reduce its debt position.

Over two years ago, it pulled plans to raise money in a public share sale.

Its chief executive told Reuters in April that it had no intention of seeking an initial public offering in the short or medium term.

In recent years, Eir has focused on rolling out high-speed broadband in the country.

Revenue for the year ended June 30 last year was €1.3 billion and adjusted earnings were €481 million, according to the Financial Times.

A version of this article appeared in the print edition of The Straits Times on June 11, 2016, with the headline 'GIC to buy 16% stake in Irish telco group Eir'. Subscribe