GTL Infrastructure stake sale prone to worth agency at Rs11,000 crore

Mumbai: A stake sale in GTL Infrastructure Ltd might see the telecom infrastructure agency valued at greater than Rs11,000 crore, two individuals conscious of the event mentioned.

The corporate is prone to be valued at about 11 instances its present ebitda (earnings earlier than curiosity, tax, depreciation and amortization), the individuals mentioned on situation of anonymity.

The stake sale course of, which started final month, is benchmarked across the valuation of current offers within the telecom house in addition to the improved tower tenancy ratios of the corporate’s 28,000-odd cellular towers, after a number of years of income and tenancy decline due to cancellation of telecom licences and intermittent freezes on capital expenditure by telecom operators, the individuals cited above mentioned.

In FY17, GTL Infra and Chennai Community Infrastructure Ltd (CNIL)—a unit of World Group, which additionally owns GTL Infra— reported a mixed income of Rs2,286.05 crore in opposition to Rs2,145.51 crore within the earlier 12 months. For 2016-17, the corporate has additionally elevated its whole tenancy to 50,845 from 40,261 in 2015-16.

The stake sale, which is a part of the corporate’s strategic debt restructuring (SDR) course of invoked by its lenders in September, might additionally see GTL Infra founder and chairman Manoj Tirodkar’s World Group fully exit the corporate he based in 2004. As per the newest company filings, World Group is presently left with a stake of near 22% within the merged entities of GTL Infra and CNIL, which homes round 17,500 towers acquired from Aircel Ltd in 2010. The merger was authorised by the boards of each corporations in April.

As a part of the SDR course of, a consortium of state-run banks have transformed the corporate’s excellent loans value Rs4,492 crore into fairness.

The lenders who presently personal greater than 51% stake must promote no less than 26% of their holdings to a brand new purchaser by subsequent 12 months for the SDR course of to succeed. Below Reserve Financial institution of India pointers, the conversion of debt to fairness below SDR ought to occur inside 210 days of the evaluation and reference date, and the induction of a brand new investor ought to happen inside 18 months from the date.

Whereas an electronic mail question despatched to Union Financial institution of India, which is amongst GTL Infra’s largest shareholders, remained unanswered, individuals cited above maintained that the lenders are but to take a last choice on Tirodkar’s proposal. The proceeds of the fund-raising by GTL Infra promoters is predicted for use for repaying the excellent debt of GTL Ltd, one other group firm which too has unpaid debt of upwards of Rs6,000 crore, mentioned the primary individual cited above.

“There are frequent lenders in each GTL Infra Ltd and GTL Ltd and it might be within the curiosity of the lenders to provide an exit to Tirodkar. As soon as lenders promote their 26% stake, they are going to be ready to attend longer to promote their remaining stake, presumably at a greater valuation.” mentioned the second individual cited above.

The Monetary Categorical reported in April that GTL Ltd is in talks with lenders for a one-time settlement.

“The SDR guidelines stipulate lenders to promote no less than 26%, nonetheless, to boost shareholder worth and allow the lenders and minority shareholders to unlock higher worth of their investments, ought to it’s required, promoters are prepared to take part within the consolidation course of,” a spokesperson for GTL Infra mentioned in response to a question on World Group’s plan to exit GTL Infra.

GTL Infra has employed New York-based Faucet Advisors, a telecom sector focussed M&A advisory agency, to widen the attain of the public sale course of which is being managed by EY.

“We at GTL Infra is dedicated to develop the enterprise and ship on our promise to lenders to fulfil SDR obligation by discovering traders for lender’s stake sale in 18 months as stipulated by SDR pointers,” mentioned a GTL Infra spokesperson.

Tower corporations internationally have transformed themselves into REITs as a result of they’ve property on the bottom and are assured of long-term annuity revenue.

We imagine that REITs, strategic tower gamers and different international traders may very well be eager about our tower property, accordingly TAP Advisors have been appointed to help the corporate and EY to find a value, deliver high quality international consumers to the desk and strengthen the investor induction course of” a GTL Infra spokesperson mentioned.

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