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Hutchison loses Eircom plan in court
18 May 2012
Senior lenders will take control of Eircom after court backs examiner’s decision to reject Hutch’s €2bn bid
Hutchison Whampoa has lost a legal motion to block a rescue plan for Irish operator Eircom in an Irish court, reported the Financial Times. Now, the senior lenders, including Blackstone, Deutsche Bank and hedge funds, will assume control of Eircom, which owns €4.1 billion.
On May 17, Dublin High Court overturned the challenge made by Hutchison and junior lenders, which claimed the decision as a “significant failure” on the part of the examiner, Michael McAteer, after he declined Hutchison’s €2 billion bid for Eircom in April, added the Financial Times.
In Irish company law, the examiner is the administrator of a bankrupt company, charged with finding a restructuring plan.
The judge rejected the application, stating that the bid would effectively involve the court in implementing a commercial judgement.
A creditor’s meeting will be conducted on May 18, where senior lenders are expected to support the rescue plan, in which most lower-ranked lenders and shareholders would be eliminated and the ownership will be handed over to the senior lenders. GTB
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