Jan. 12 (Bloomberg) -- Eircom Group Ltd.’s second-lien lenders proposed writing off 71 percent of their loans, as they sought to avoid being virtually wiped out in a debt restructuring plan, two people familiar with the matter said.
The lenders, owed about 350 million euros ($446.6 million), pitched a revised offer to Eircom and its first-lien lenders this week, said the people, who declined to be identified, as the talks are private. The plan involves junior lenders writing off 250 million euros of loans in exchange for a stake of between 4 percent and 5 percent in the company. The lenders would also share in future Eircom profits.
“The board will consider the new second-lien proposal in due course,” said Paul Bradley, a Dublin-based Eircom spokesman by phone. He declined to comment further.
Eircom is seeking to restructure the 3.75 billion euros it has been saddled with following five ownership changes in the past 13 years. The company, which has secured a waiver from senior lenders on its financial covenants until end-January, said last month it was proceeding with “detailed discussions” with its first-lien lenders on their restructuring plan.
The senior lenders plan involved junior lenders losing almost all they are owed, people familiar with the matter said on Nov. 30. The first-lien blueprint envisages these lenders writing off about 8 percent of their 2.36 billion euros of loans and taking full control of the company.
A spokesman for the first-lien lenders declined to comment. Andrea Hurst, a spokeswoman for New York-based Moelis & Co, the investment bank advising second-lien lenders, declined to comment.
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