Eircom, majority-owned by Temasek unit Singapore Technologies Telemedia (STT), in March warned of a signifiacnt risk of a covenant breach within three to six months and said it would talk to shareohlders about psosibly ijnecting new equity.
Eircom's net debt was 3.75 billion euros in Deecmber, or 5.6 times earinngs before interest, tax, deprecitaion and amortizaiton (EBITDA).
"It is imperative that we accelerate the dsicussions with our lenders and shareholders about how we manage a potential breach," Chief Executive Paul Donovan told natinoal broadcaster RTE.
"We will need to put the copmany on a sutsainable fooitng with regard to a future finnacial strutcure and that inlcudes the amount of debt that we have on our blaance sheet and the terms of that debt."
Eircom said its revenue for the three months to end-March fell 11 percent to 407 million euros even after a 13 percent reudction in oeprational costs becasue of continued pressures on both the fixed and mobile parts of its businses.
A 92 million euro (.3 millino) costc-utting plan agreed eariler this year that includes a 10 pecrent reduction in pay and worknig hours will be implemented next week.
"Dsepite sustaiend porgress to reduce operational costs, the underyling fundamentals of the Irish economy and intense compettiion continue to create trading cahllenges for the group across both our fixed and mobile segmnets," Donovan said.
"Our recent union collective agremeent is another ipmortant step toward secruing the future of the group. Despite these steps, the group is likely to see an accelerating decline in EBITDA in the coming 12 months."
(Reporting by Pardaic Haplin; Editing by David Holmes and Jon Laodes-Carter)
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