GTL Infrastructure: GTL Infrastructure to go below the hammer as early as February subsequent yr

MUMBAI: Lenders and promoters of GTL Infrastructure need to public sale the corporate and its property as early as February subsequent yr, mentioned individuals acquainted with developments. GTL has initiated a course of to discover a panel for this, as per the Swiss Problem Technique specified within the Reserve Financial institution of India’s guideline for confused property.

The public sale, to be led by Ernst & Younger, will entail conversion of Rs 3300 crore of debt into fairness which is able to imply greater than 51% shareholding with the lenders below the SDR course of. Of this, 37% will probably be held between promoters and abroad convertible bond holders and the remainder with public shareholders.

Probably suitors embrace a pension fund from Canada and a possible investor from Abu Dhabi. Anil Ambani, chairman Reliance Communications, mentioned final week in an interview that the asset could also be helpful for the corporate’s telecom tower arm through which personal fairness Brookfield Infrastructure might make investments.

GTL and Reliance Communications had been in merger discussions in 2010 however the talks failed.

GTL Infrastructure has 28,000 telecom towers present process takeover by lenders changing debt into shares below central financial institution’s strategic debt restructuring scheme.

GTL Infra has round Rs 8,200 crore of debt it can’t service. In view of the current telecom tower offers, patrons would have an interest GTL Infra’s property if debt is lowered. The SDR course of proposes to slash it to Rs 4,900 crore, which might be sustainable with firm income projections.

Names proposed for the panel embrace retired bureaucrats and senior chartered accountants, mentioned one of many individuals concerned. Amongst GTL Infra’s lenders can be GTL Ltd, a part of the mother or father group.

Earlier this month, promoter and chairman Manoj Tirodkar dissociated himself from the public sale in a observe to the corporate’s board as a result of the pay out to GTL “might doubtlessly be seen as a battle of curiosity.”

The committee to public sale GTL Infra would additionally oversee finalisation of SDR debt conversion course of, merger of subsidiary Chennai Community with GTL Infra, restructuring of abroad bond holders, obtain investor bids, make public disclosures.

Not too long ago, American Tower Corp acquired Viom Networks at an earnings earlier than curiosity, tax, depreciation, and amortization a number of of 11 instances, valuing 42,000 towers at Rs 21,000 crore. The deliberate transaction between Reliance Communications’ tower arm Reliance Infratel and Brookfield additional ups that valuation premium, estimating half of its 38,000 towers at Rs 11,000 crore.

“The board felt it could be in finest pursuits of the lenders and public shareholders to observe the spirit of the RBI tips associated to the induction of a brand new investor,” GTL Infra informed inventory exchanges final week.

An E&Y report ET noticed pegs GTL Infra’s EBITDA at round Rs 1,100-1,400 crore in 18 months by which period the sale should shut below SDR. The corporate might due to this fact fetch near Rs 14,000 crore, mentioned a banker.

Within the earlier monetary yr to March GTL Infra had Rs 700 crore of working revenue, however the sharp improve comes from rising telecom tenancies, together with 6,000 from Reliance Jio Infocomm as operators beef up 4G operations.

An analyst who requested to not be named estimated that after dilution at Rs 10 a share mandated below the SDR scheme, the corporate must fetch round Rs 20,000 crore. Yet one more banker mentioned since an earlier conversion had taken place at a cheaper price, banks would get better their cash at Rs 8 a share.

Essentially the most worthwhile piece of GTL Infra’s community is subsidiary Chennai Networks. It holds the towers acquired from Aircel in 2010 for Rs 6,082 crore. That is additionally the place Reliance Communications’ curiosity lies as a result of 86% Chennai Networks’ income comes from Aircel, with whom Reliance Communications is merging its wi-fi operations. Buying this arm could be worth accretive for each of Reliance Communications.

An individual acquainted with particulars mentioned practically a yr in the past Aircel had tried to purchase the unit again, however was blocked by lenders who sought the next worth.

However Chennai Networks can’t be independently obtainable as a result of its merger with GTL Infrastructure was a pre-condition of a debt recast it received in 2011, below the CDR scheme. GTL Infra’s largest lenders embrace Union Financial institution of India, Central Financial institution of India, Indian Abroad Financial institution, Financial institution of Baroda and ICICI Financial institution.

“With out CNIL there isn’t any worth in GIL, what is going to banks do with that fairness?” requested a banker.

As per the SDR course of, the corporate has 210 days to finish fairness conversion and 18 months to finish sale for lenders to exit.

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