Paul Donovan, the outgoing CEO of eircom, has said Hong-Kong rival Hutchison Whampoa simply didn’t put enough money on the table when it made an approach for the Ireand-based operator.
Donovan, speaking at the TM Forum Management World event in Dublin, said his company still needs a strategic investor as it battles to reduce its debt amid an economic climate that he likened to “catching falling knives”.
Eircom has been under pressure since March, when it was placed in Irish “examinership” – effectively a form of bankruptcy protection.
HW made a bid for the company, but this and a subsequent challenge was thrown out by the Examiner in April, meaning senior lenders are likely to take control.
“They were not prepared to pony up enough money,” said Donovan.
The CEO, who announced in March that he will step down at the end of 2012, is heading to the High Court later today for the final verdict.
He said eircom’s debt would be reduced by €1.7 billion – the largest debt reduction in Europe this year – leaving it on a much sounder footing.
“Lenders have taken a haircut and we have made aggressive plans to rejuvenate the business,” he added.
The CEO also used his speech at TM Forum to outline where the company went wrong and what prospects it held moving forward.
He said decisions by the previous management regime to sell its mobile business eircell to Vodafone in 2001 was “a major strategic error”.
Even in 2009, four years after the purchase of another mobile operator Meteor, the company was five years behind its competitors in Europe, according to the CEO.
Today, the company still has “a long way to go” but the building blocks for a business transformation are now in place.
eircom is investing €1.3 billion over the next five years; it is rolling out 4,000 WiFi hotspots while 100,000 homes will get connected to the “long overdue” high-speed fibre network this summer.
Problems remain, however, when it comes to finding someone who will become the company’s strategic investor.
“We don’t have procurement scale of bigger international operators and we don’t have the in-house innovation of someone like Telefonica Digital,” concluded the CEO.