By Andrew Bushe
DUBLIN — The share-swap deal to sell the Eircell mobile phone company to the British giant Vodafone is to be voted on at a May 11 meeting of Eircom in Dublin.
The Eircom board is unanimously recommending the deal. It will mean that about half a million ordinary shareholders who bought stock when the company was privatized will end up owning a stake in Vodafone as well as their shares in what is left of Eircom.
The deal structure involves the demerger of Eircell to a new company called Eircell 2000. Eircom shareholders will get one share in Eircell 2000 for every one they hold in Eircom.
The Eircell 2000 shareholders will then be swapped at a rate of 0.9478 Vodafone shares for every two Eircell 2000 shares.
Eircom said that if the deal goes through, it plans to refocus its other businesses, cut 3,500 jobs, reduce costs, amalgamate its two internet servers and get out of loss-making multimedia and internet-software and content-development investments.
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The record number of people who bought shares when Eircom was privatized are sitting on substantial losses. The shares were floated at 3.90 euros and are now worth 2.40 euros.