A spat has erupted between lenders to Eircom, the Irish telecoms company buried under ¤3.75bn (£3.3bn) of debt.
It is understood that second lien, or junior, lenders – owed ¤350m – have asked to join the main committee negotiating a restructuring of the loans on behalf of Eircom's major creditors. This smaller group, which includes Park Square Capital and Axa, are worried that their loans will "get squeezed" without a presence at the negotiating table, according to a restructuring source. However, the senior lenders, represented by restructuring experts at Houlihan Lokey and Kirkland & Ellis, are believed to have turned down the second lien's request.
The main lenders include the Blackstone-owned credit business GSO Capital Partners and investment group Alcentra. There is some crossover between the two sets of lenders.
It is thought the senior lenders could try to force Singapore owner STT Communications to inject equity into the business. Employees have already taken a 10 per cent pay cut to help save Eircom – one of the most high profile victims of Ireland's financial crisis.
The second lien lenders are expected to ask restructuring teams to pitch for the job. It is rumoured that Allen & Overy is providing legal advice.