Eircom ESOP: when's our next windfall?

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Questions arising:

Why can the STT shareholding not exceed 50%?

Why are we told, STT Offer is not conditional upon re-org of eircoms balance sheet, and then told that we may have to inject up to €10.3m within 18 months?

Notwithstanding the above and other questions which need clarification, would we be better supporting the Proposal, which may give us a better chance of recovering value in the medium/long term, or sticking with the wholly discredited ERC structure as is?

Of course the answer to the above will depend totally on whether you are a former or present eircom employee.

There is definitely a difference in perspective for both types of ESOP members, but I seriously doubt that even former employees would not wish to give their former company a fighting chance for the future, with a proven Telecoms investor.
 
irishpancake said:
There is definitely a difference in perspective for both types of ESOP members, but I seriously doubt that even former employees would not wish to give their former company a fighting chance for the future, with a proven Telecoms investor.
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I have sympathy, and I haven't quite made up my mind how to vote yet. However, I expect ESOP to act in the best interest of the beneficiaries of the trust, independent of whether this is in the best interests of non-ESOP members (although it is not clear to me that this is actually what is happening). I know this seems harsh, and I'm not suggesting that I don't care about non-members, it is simply my understanding that ESOP are legally obliged to act in the best interest of members. Now, I could be wrong, so don't go mad if I have misunderstood the situation.
 
brasstax said:
Firstly, STT is not a Telco but an investment arm of Singapore Government. I would urge a NO vote until such time that he ESOP outlines clearly it's plans for our moneyj
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You're right, they're not a telco as such, rather a conglomerate largely focussed on telecommunications - they do share ownership with SingTel (the incumbent Singapore telco), via Temasek - the investment arm you mention, and they have partnerships with a number of other telcos and telecommunications companies.

They're clearly a better option than a bunch of venture capitalists who want out - if the deal were to fall through Eircom could be royally f***ed. Now I don't work for the 'com anymore, but I don't see the point in jeopardising the deal, and the long term value of the Esop, in order to (possibly) bring one payment forwards by a couple of months.

I agree though that the Esop management are overly secretive, this is probably a legacy of when Eircom was publicly quoted and they obviously didn't want potential share dealings revealed in advance.
 
Presumably it is similar to the obligation of a board of directors to shareholders. Though again, I may be completely misunderstanding things.
 
And who said we'd get a payment in a couple of months.....that's the problem....ESOP won't tell us anything.
I voted NO and I do hope the end result is NO. Vote NO.

Why won't they come clean abouy the December payment?
Why can't they tell us when we'll receive our next payment?


[qoute

They're clearly a better option than a bunch of venture capitalists who want out - if the deal were to fall through Eircom could be royally f***ed. Now I don't work for the 'com anymore, but I don't see the point in jeopardising the deal, and the long term value of the Esop, in order to (possibly) bring one payment forwards by a couple of months.
 
shweeney, You are correct in your analysis and yes STTare probably our best chance for the future and would probably get full support except for the lack of information about future schedule (as stated by Luckylou and others). Perhaps they are waiting until after the Budget before announcing plans making payments
 
irishpancake said:
Questions arising:

Why can the STT shareholding not exceed 50%?

Why are we told, STT Offer is not conditional upon re-org of eircoms balance sheet, and then told that we may have to inject up to €10.3m within 18 months?

Yes pancake, these are questions I would like answered too! Does anyone know the answer? Is there any point in asking the esop? Or are they still wearing their deaf, dumb and blind sign?
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Vincentj,
Moderator note: VincentJ's post was seriously defamatory and abusive and has been removed. As he had been warned previously for this - he has been banned

"Least time possible"?

Seriously, if you can't read and decide on a document within a two-week period you must have a problem, or perhaps you are blinded by your prejudices.

In fact ESOP 21 is a very informative document, allowing for the obvious constraints which will pertain when there are on-going negotiations and commercial sensitivities.

I really feel that your constant references to a Christmas pay-out is misguided populism and short-term thinking at best, given the obvious current economic circumstances, in case you hadn't noticed.

I am not one who blindly supports the ESOP board, and they could certainly improve their communication policies. I too would have been critical of quite a lot of what has happened over the past number of years, hopefully in a constructive fashion, but that is another debate.

However, to heap unwarranted abuse upon them for acting in the interests of all the participants, having taken all the appropriate legal and commercial advice, is just not right.

I hope those participants who log on here will take a step back and not fall for this populist and abusive short-termism.

There is a lot at stake here, and people need to take the sensible option.

I say vote YES. I have.
 
My instinct was to vote yes, that is until I read Esop Extra 21. It would appear to me that STT do not require or need investment in Eircom from the Esop. I have no objection to STT having more than a 50% stake in the company.

In fact I would propose that it is those who are resistant to change within the company who are urging us to vote yes. It looks to me like the board are more concerned with securing their own position within the whole scheme of things than anything else and in my very humble opinion this publication is a testament to that.

It is time to wind up the Esop, it has served its purpose. I am, of course, open to correction and counter argument.
 
circular issued from union hq this morning it seems to me after reading this,as soon as the ballot is in we will get our divi.also irish indo writes an article about the staff geavy train in eir com and money will continue to be doled out.happy days
 
ex-union said:
circular issued from union hq this morning it seems to me after reading this,as soon as the ballot is in we will get our divi.also irish indo writes an article about the staff geavy train in eir com and money will continue to be doled out.happy days
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but again nothing confirmed from esop about such a payment after the ballot - so for me, its still waaaaay up in the air
 
ex-union said:
circular issued from union hq this morning it seems to me after reading this,as soon as the ballot is in we will get our divi.also irish indo writes an article about the staff geavy train in eir com and money will continue to be doled out.happy days
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Do you have a link for the article?
 
The [broken link removed] is interesting, in that it gives an objective overview of what has been delivered by ESOT since 1999, in cash terms:

It details how the 12,500 members have received more than €770 million in tax-free cash since Eircom’s privatisation in 1999.
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And present portfolio:

The Esot still owns 36.1 million Vodafone shares, which are currently worth €54 million.

It also owns 98.9 million preferences share in Eircom redeemable at €1 each.

Then there’s the ordinary shares in Eircom, which comprises its 35 per cent stake.

The document says it is “difficult to determine” the value of this stake. “Their true value may only be known when there is an opportunity to sell them.”
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I feel that it is vitally important that ESOP participants, whether they are current eircom employees or not, should bear these facts in mind when deciding how they vote in the ballot.

Also, bear in mind that the ESOP is highly regarded by other in the state and semi-state sectors, not to mention those in the private sector, as we are.

With a 600% return on its investment and a 900m booty, it's no wonder the Eircom ESOP has become a role model for other semi-state workers
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from Sunday Tribune in Jan 2005



ESOT at the cabinet table

Well they must be. Why does these guys get such unbelievably favourable treatment from the government?
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and lots more if you Google eircom ESOP
 
taken from enn.ie today

The paper also reports that the Eircom employee group Esot, which owns 35 percent of the telco, could have to pay up to EUR10.3 million to buy additional shares in the business as a condition of the sale of the company to Singapore Technologies Telemedia (STT). An acquisition document was sent this week to the Esot's 12,500 members. Under the terms of STT's proposed AUD225 million takeover of Eircom, the Singapore telco does not plan to own more than 50 percent of Eircom. The Esot will rollover its 35 percent stake. In the event that all existing Eircom shareholders take the cash offer, convertible loan notes for about 15 percent of the company will be issued. A third-party investor will be sought for the loan notes but if none is found by mid-2011, the Esot will be obliged to buy them.
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The Esot still owns 36.1 million Vodafone shares, which are currently worth €54 million.
It also owns 98.9 million preferences share in Eircom redeemable at €1 each.
Then there’s the ordinary shares in Eircom, which comprises its 35 per cent stake.
The document says it is “difficult to determine” the value of this stake.
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So looks like ESOT have about 153M in reasonably liquid assets. Based on previous payouts that only equates to about 15k for each esop member with a full allocation.

As for what is left, who knows how much the 35% stake in eircom is worth.
 
IrlJidel said:
So looks like ESOT have about 153M in reasonably liquid assets. Based on previous payouts that only equates to about 15k for each esop member with a full allocation.

As for what is left, who knows how much the 35% stake in eircom is worth.
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Yes, with reservations.

The preference shares are the only reliable "known" in the portfolio.

Voda share prices are fluctuating, and are subject to currency variations, so valuing these is somewhat problematic, and always subject to the usual warnings about share prices, can go down as well as up.

See chart below.

[broken link removed]

The value of the 35% stake will only become clear upon a future realization event, e.g. an IPO before March 2014.

Up to that date, it will be up to the new owners, STTC/ESOT and others to ensure there is sufficient investment in the company to make an IPO a success for all.

To characterize the remaining portfolio as "only" equating to €15k per participant is to:

a) totally disregard the €770,000,000 paid out to participants already (€50,000-€60,000 per participant)

b) disregard the Voda shareholding potential value, if handled wisely by ESOT

c) underestimate the very real possibility of considerably enhanced share value at a future IPO for our existing 35% shareholding, which could be as much as 50%, depending on company future performance.

I ask participants:

.....keep your head when all about you
Are losing theirs and blaming it on you;
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as a thought maybe just maybe they are waiting for a result of ballot before they know how much to pay out .
 
doughnut said:
as a thought maybe just maybe they are waiting for a result of ballot before they know how much to pay out .
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well if that was the case - why cant the esop just come out and say that? or actually same something other then nothing
 
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