One of the investors that originally took Eircom off the Stock Exchange in 2002 yesterday sold the bulk of its holding in the company for €42 million.

Venture capitalist Providence placed 27 million shares at €1.56 each through stockbrokers Morgan Stanley and Davy yesterday, netting it €42.12 million.

The sale amounted to 3.5 per cent of the company.

Providence originally had around 35 million shares, or 4.5 per cent. It retains eight million shares.

There was no indication of who bought the shares at close of business yesterday.

The sale came one month after the end of a 180-day lock-in period, during which stock exchange rules required Providence to keep its stake in the company, which refloated on the Dublin and London markets last March.

Providence was bound by the clause as it was one of the original investors in the Sir Anthony O'Reilly-chaired Valentia Consortium that bought and delisted Eircom in 2002 and subsequently refloated it this year.

As the lock-in period ended during the last week in September, the markets had been expecting a sale of Eircom shares. The news had some impact on the price, which closed 1 cent higher in Dublin at €1.56 after touching highs of €1.61 in the afternoon.

None of the parties involved in the sale would comment yesterday. However, a number of market sources confirmed that Providence had sold the shares.

The venture capitalist will be obliged to confirm this officially to the market over the next few days as it sold more that 3 per cent of the company.

Similarly, if any single party bought enough shares to bring their holding to more than 3 per cent, market rules will oblige them to make this known.