Here comes another Eircom headache

It’s been a particular achievement of the last 11 years of government to have had Eircom try a few years with every just-past-its-prime ownership model.  The current is the Australian innovation of an investment bank which runs a separate fund bringing in other investors to own and manage the target company which is acquired with hefty debt; the parent (Babcock and Brown) collects management fees from the fund.  The setup was pioneered by Macquarie, Australia’s largest investment bank.  But for months there have been suggestions that B&B will need to offload the funds with identifiable assets, like Eircom, to raise funds, and the post AIG/Lehman hangover is bringing things to a head –

Macquarie, Australia’s largest investment bank, fell 18 percent to A$27.71 at 10:41 a.m. Babcock & Brown Ltd., the nation’s second-largest investment company, dropped 18 percent to 75.5 cents. Both companies are based in Sydney … Babcock & Brown, which also borrows to buy assets, has shed 97 percent of its market value this year, trailing only Fannie Mae and Freddie Mac among the MSCI World Index’s biggest losers. The company yesterday had the credit rating of its international unit cut by S&P to two levels below investment grade.

So once again Irish communications infrastructure will be in the hands of God knows who in a few weeks.  Though at the rate things are going, it could be in the hands of another government.