GTL bets on telecom tower sale to repair debt downside

With lenders set to take management of GTL Infrastructure by conversion of debt into fairness, the stage is ready for GTL group founder, Manoj Tirodkar, to lastly exit the telecom tower firm that he constructed from scratch. The sale would assist Tirodkar to boost funds to repair his group flagship GTL Ltd’s debt issues that sank the whole group over the previous six years.

Tirodkar, 52, began his journey from the standard bylanes of Girgaum in South Mumbai and rose to grow to be a billionaire by 2010. However quickly, he fell from grace, triggered by a failed merger with Anil Ambani-owned Reliance Communications in the identical 12 months. The inventory crash in

June 2011 was so extreme that the group has not been in a position to get again on its ft until date.

Analysts mentioned Tirodkar’s comeback plan relies upon loads on the valuation of GTL Infrastructure, which has a market capitalisation of Rs 668 crore as on Tuesday. In April this 12 months, Srei and Tata Teleservices bought their 49 per cent stake in Viom Networks for Rs 7,500 crore. Whereas Viom owns round 42,200 wi-fi communications towers throughout India, GTL Infrastructure owns 27,000 towers. “We might promote at an 8-10 occasions of GTL Infrastructure-Chennai Community’s Ebidta (earnings earlier than curiosity, depreciation, tax and amortisation) of Rs 1,500 crore. However any investor would first wish to have a clear steadiness sheet and readability on debt standing earlier than it may make the leap. We try to filter all of the pending points and hope to promote stake as quickly because the merger of GTL Infrastructure and CNIL is over,” mentioned Manoj Tirodkar, chairman of GTL group, on Tuesday. On Monday, the corporate introduced conversion of loans into fairness that will convey down the promoter’s stake within the firm.

GTL bets on telecom tower sale to fix debt problem

Although GTL and CNIL had an Ebidta of Rs 1,500 crore as on March 2015, over time its monetary metrics had deteriorated (see chart). The agency blamed the cancellation of 2G licenses by the Supreme Courtroom, slower 3G progress and broadband, and decrease spending by telcos for the shortfall.

An bold Tirodkar had taken over Chennai Community from Aircel for Rs 8,100 crore in 2010 in an all-cash deal. However quickly, the debt-funded transaction turned bitter as the corporate’s money flows did not match its obligations. The banks, then, accredited a company debt restructuring and GTL Infrastructure and CNIL then repaid Rs 3,392 crore to lenders with none incremental borrowings over the previous few years. In accordance with BSE statistics, GTL Ltd and GTL Infrastructure’s standalone debt was Rs 6,600 crore as of March this 12 months.

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