It’s a story given contemporary relevance by the emergence of the National Broadband Strategy and all of its attendant frustrations. The documentary is an ensemble piece featuring characters from every walk of Irish life who all shared in what ultimately proved to be a collective economic folly in the summer of 1999, one with far reaching consequences for the state of telecommunications in Ireland in the twenty first century.
Contributors
It’s cast of characters come from those closest to the flotation, those in government, unions, the media who covered it, economists and commentators, and members of the public who lost (and in some cases gained) on the back of buying shares in Telecom Éireann.
It features former Minister of Public Enterprise Mary O’Rourke, former Former General Secretary of the CWU and chairman of the Telecom Éireann Employee Share Ownership Trust Con Scanlon, former Business Editor of The Sunday Independent Shane Ross, Former Chief Economist of the Irish Congress of Trade Unions Paul Sweeney, Journalists and broadcasters Matt Cooper and Richard Curran, Economist Colm McCarthy, Business Editor of The Sunday Times Brian Carey and Former Secretary General of the Dept of Department of Communications, Energy, Marine and Natural Resources Brendan Tuohy.
What happened to Telecom Éireann?
Following Telecom Éireann from its establishment in 1984, spun out from the Department of Posts and Telegraphs, the documentary tells the story of how the company grew from a much maligned and neglected section of a government department into a modern and competitive telco.
It sets the scene and the context for the flotation, Ireland in the go go 90s. As the Celtic Tiger economy took off, ordinary Irish people for the first time in a generation began to have access to a novel item: disposable income. Confidence was high and employment was plentiful. It was in this context that the state started to hunt around for ways to assert itself in the global marketplace.
The public mood towards privatisation was positive, verging on the euphoric. With effectively zero popular or political resistance, the public at large was encouraged to ‘Join In’ and buy shares in the newly privatised company. The ad campaign promoting the share offer is an amazing cultural artefact as people march across the countryside, torches in hand towards a bright new future. Some 547,000 members of the public signed up to buy shares, many by borrowing, and in the wake of the flotation on the Dublin and New York Stock Exchanges, the shares rise in value.
But by September 2000 the share price has tanked. Anybody who sold their shares in the first few months made gains. Anybody who waited saw the price sink well below the floatation price. The September AGM is attended by thousands of angry shareholders, furious that their shares are already worth 30% less than what they paid, and that senior management saw fit to sell off the mobile phone arm Eircell within the first year.
With the share price weakened but with enormous assets and a huge customer base, the new Eircom becomes a target for hostile takeover. The first of these is completed by Tony O’Reilly’s Valentia consortium via a leveraged buyout. This means that the borrowed money used to purchase Eircom became debt on its own balance sheet immediately making the company less healthy financially.
The second was by Australian financiers Babcock and Brown. They repeat the same process, borrowing funds to purchase the company and then adding that debt to Eircom’s balance sheet and are more aggressive in their cost cutting and asset stripping. By the end of their tenure, the controlling interest in Eircom is bought for only €39m and its debts are €4billion.
Eircom’s journey ends in the High Court. While the floatation of Eircom was done with much fanfare, it’s failure came with a whimper. The new owners applied to the High Court for examinership: Eircom needed protection from its creditors and was no longer solvent. It had taken just 13 years to take the company from a valuation of over €10 billion to one of effectively zero. In granting the examinership Justice Peter Kelly laments that “the company was the subject of a game of pass the parcel – each time it changed hands the company lost something” – until there was nothing left.
Broadstone Films
Sold – The Eircom Shares Saga was made by Broadstone Films. It was directed and edited by Tom Burke (Losing Alaska, The Liberties) and produced by Thomas Kelly. They previously collaborated on Shooting the Darkness (2019), a documentary about the Troubles in Northern Ireland and the men who unwittingly became war photographers on the streets of their own towns.
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