Telecom tower firm GTL Infrastructure is anticipating to rake in about ₹2,000 crore as compensation for cancellation of three,987 tenancies with telcos are shutting down operations as a part of business consolidation. GTL will even achieve one other ₹120-300 crore from lowering infrastructure working prices.
GTL Infra, which efficiently got here out of a Strategic Debt Restructuring (SDR), would use the proceeds to repay debt. The corporate has a complete debt of ₹4,193 crore as of April 30, 2017.
Consolidation within the sector
GTL Infra had misplaced a complete of three,987 tenants following the spate of consolidation within the telecom sector.
It misplaced 2,230 tenancies from Tata Teleservices, 1,327 from Reliance Communications and one other 430 from Sistema Shyam. GTL Infra’s complete tenancy – operators it hosts on cell towers – stood at 51,424 as of September 30, 2017.
“This quantity had already accounted for lack of all the tenancies of RCom and a considerable portion of tenancies of TTSL. GTL Infra expects an extra influence of 9,000-11,000 tenancies on account of consolidation of Vodafone India and Concept Mobile and Aircel over the following 12-18 months. Nonetheless, with the estimated addition of 10,000 tenancies throughout this era, we imagine this influence might be offset,” it mentioned in a regulatory submitting.
GTL Infra had initially projected it to succeed in 56,000 by March 31, 2018.
“With respect to the continuing mergers of Airtel-Telenor and Concept-Vodafone, there are a complete of two,589 tenancies at present out of lock in. Regardless of the expiry of the lock-in, these websites have been persevering with for a median of greater than two years and as well as the corporate is in lively negotiations with the operators for relocation of sure overlapping tenancies,” it mentioned.
“Nonetheless, this could signify the worse-case situation influence of this ongoing consolidation based mostly on the prevailing contractual provisions,” it added.
The second half of the present fiscal additionally noticed “vital occasions” that had been past administration management. As an example, TTSL didn’t switch its contracted tenancy obligations to Airtel as a part of the merger and issued exit notices, whereas RCom can be shutting down its wi-fi enterprise.
GTL Infra additionally accomplished its merger with Chennai Community Infrastructure Ltd, a particular goal car fashioned to park 17,500 towers and 21,000 tenants it acquired from Aircel in 2010. The efficient date of the merger was December 22, 2017.
Following its SDR, the corporate had decreased its secured debt to ₹4,193 crore as of April 13, 2017. Its debt (optionally convertible FCCBs) had been introduced all the way down to ₹560 crore from ₹1,442 crore.
Publish consolidation, remaining operators might want to develop and improve their networks to account for elevated subscribers and continued demand for knowledge companies. The corporate is already on observe so as to add shut to five,000 tenancies within the present fiscal and expects so as to add one other 5,000 tenancies throughout April 2018 to March 2019.
GTL Infra can be pursuing a refinancing plan that can assist it scale back annual debt servicing by ₹150 crore.