KPN gives up Eircom stake

Telco finds it bit off more than it can chew...

Dutch telco KPN is selling its stake in the Irish telco Eircom for $568m in an attempt to recover from huge debts. KPN is attempting to reduce its E22.8bn (£14bn) debt, which grew after buying a majority stake in German mobile phone company E-Plus Mobilfunk and licences to create faster wireless internet access, by flogging 15 assets. The stake in Eircom will fall into the hands of the Valentia Group, run by billionaire Tony O'Reilly. Valentia Group was given the go-ahead for a takeover of Eircom on 2 November this year by the Irish enterprise minister Mary Harney. As part of its debt reduction battle, KPN sold its 21 per cent stake in the mobile operator division of Eircom, Eircell to Vodafone earlier this year in a share swapping deal.