AN EXAMINER has been appointed to indebted telecoms firm Eircom where 1,000 jobs are on the line.

The High Court’s Mr Justice Peter Kelly said he was satisfied the company is insolvent and has a reasonable prospect of survival.

Eircom has nearly €4bn in debt.

Mr Kelly said he was aware that job losses are on the cards but he added the outcome would be worse if the company was wound down.

The court appointed Michael McAteer of Grant Thornton as examiner.

The examinership process gives the company court protection from its creditors for up to 100 day while it restructures.

Eircom is seeking to have €3.8bn in debts restructured by writing off around €1.7bn in bonds and corporate loans.

Paul Donovan, chief executive of Eircom Group, said the High Court had acknowledged the importance of the telecoms business to the state.

"It is business as usual at Eircom during the examinership process," he said.

"Customers can be reassured that all voice, broadband and data services will continue. In addition, the company will honour all outstanding work and payments to suppliers. Staff will continue to be paid on time.

"We fully intend to honour our existing investment commitments, including fibre rollout to deliver high-speed broadband and TV services for Eircom customers. This network upgrade is already under way and new services should be offered later this year."

Three businesses - Eircom Ltd, Meteor Mobile Communications Limited and Irish Telecommunications Investments Limited - are affected by the examinership.

Under the business plan proposals put before the court, Eircom's gross debts would be reduced from about €4bn to just over €2bn.

The company had been valued at about €8.4bn around the time of its flotation in 1999.

Steve Fitzpatrick, general secretary of the Communications Workers' Union (CWU), said the court action had been almost inevitable.

"The massive debt burden loaded up on the company through a series of cash grabs by the procession of its previous owners has meant that there was always a probability that it would ultimately need the protection of the courts to sort this mess out," he said.

"This day has now arrived."

Mr Fitzpatrick said the examinership should help create a stronger company, better equipped to rebuild for the long term.

The CWU is planning for negotiations with management on potential job cuts.