Chorus owes EUR385m to banks and investors

Chorus, the cable TV operation placed in examinership yesterday, is understood to owe approximately €220 million to 20 different banks.

The company has said it is confident as to its future viability and that all its 550 jobs are secure.

Yesterday morning, prior to the approach to the courts, Independent News & Media (IN&M) agreed to sell its stake to the other 50 per cent owner, US communications giant Liberty Media. The sale is understood to have been for a nominal sum.

IN&M invested more than €100 million in Chorus since it first became involved with the company in 1989.

The deal agreed yesterday morning means it can now walk away.

The news had no effect on the IN&M share price.

Chorus has a turnover of €65 million and debts of approximately €385 million, a spokeswoman said yesterday. The debt includes "shareholders" loans and bank debt", she said.

Last year, IN&M announced it was writing off €82 million regarding its Chorus investment and that it would be putting €10 million into the company during 2003.

That investment was made in the company during 2003.

The latest accounts filed by Chorus, for the year to December 31st, 2001, show bank debts of €220 million. It is understood current bank debt stands at this or a higher level.

The group's accounts give its principal bankers as Ulster Bank, Bank of Ireland, AIB, Bank of America and TD Bank Europe.

Mr Justice Kelly appointed Mr John McStay as examiner to Princes Holdings Ltd and Chorus Communication Ltd, trading as Chorus.

Mr McStay said afterwards that he looked forward to "working with the management, staff and creditors, to ensure the long-term future of the company".

Mr Phil Freedman, Chorus chief executive, said the company had "a strong business plan, which provides for capital investment in our networks and products, which will give Chorus the opportunity to offer digital TV and broadband data services to most of the homes in Chorus service areas".

As well as owing money to banks and shareholders, Chorus also owes money to its traders and the State. It owes money to the regulator, the Commission for Communications Regulation, and to IDA Ireland in relation to the bulk buying of capacity from Global Crossing some years ago.

Liberty Media is to invest a further €4 million in Chorus during the examinership period.

Examiners can be appointed for a maximum of 100 days. However, the company said it expects Mr McStay's reign to end in less than 10 weeks.