Reliance Capital: GTL Infra’s lenders bar Reliance Capital arm from bidding for its tower belongings

MUMBAI: Lenders to GTL Infrastructure declined to share details about the corporate in an effort to dam a Reliance Capital arm from bidding for the telecom tower firm. GTL Infra, the place lenders at present personal a majority, is operating a sale course of as a part of a strategic debt restructuring train. After a choice to disclaim the Anil Ambani group firm from bidding on the joint lenders’ discussion board (JLF), lenders plan to ship inquiries to Reliance Capital Advisory Companies (RCASL) searching for readability on its intent of the acquisition.

The bankers on the JLF expressed issues over Reliance Capital’s intention to purchase GTL Infra, provided that its dad or mum group is exiting the telecom tower enterprise. Additionally they mentioned RCom’s personal strategic debt restructuring plan which is below approach and the dues Reliance Communications, the flagship firm of the group, nonetheless has to pay GTL Infrastructure.

“Lenders determined to not take into account a request of RCASL for participation within the SDR sale course of,” stated the minutes to the JLF assembly held on September 6, which ET has reviewed.

GTL Infrastructure declined to touch upon the problem. Reliance Group and Union Financial institution, lead financial institution on the JLF, didn’t reply to ET’s electronic mail both.Ernst & Younger, that’s operating the sale course of on behalf of the banks, additionally didn’t remark.

After the assembly, an advisory panel to the method advisable that since Reliance Capital is an impartial arm of the group that owns Reliance Communications, the ADAG group needs to be requested to make clear its intent earlier than their curiosity is rejected.

Bankers are more likely to ask Reliance Group for its newest audited stability sheet, and an evidence on its want to re-enter the telecom tower sector whilst its sister concern is able to promote its towers to personal fairness gamers.

Lenders additionally questioned whether or not the group will signal a non-compete settlement with Brookfield or whether or not this acquisition would end in inner competitors, provided that Reliance Group plans to retain 49% within the tower arm, Reliance Infratel. As frequent lenders to RCom, they’re additionally fearful about how the potential acquisition will probably be financed.

“Reliance Capital is an unrelated arm of the ADAG group to its telecom enterprise, so we have now to ship inquiries to Reliance Capital to resolve whether or not or to not share data,” stated one other individual near developments. GTL Infrastructure shares its monetary enterprise mannequin, data memorandum, and different monetary particulars with potential bidders after the “expression of curiosity” is accepted from the suitor.

“That (expression of curiosity to purchase GTL Infra) was earlier than the Aircel deal fell via. Now, RCom first must get its home so as earlier than wanting to buy belongings,” stated an individual conscious of the developments. The minutes from GTL Infra’s JLF additionally said that the method is operating a bit late, however this could not have an effect on the general timeline of the transaction. “There’s a number of volatility within the telecom atmosphere, so bidders want just a little time, however preliminary bids ought to are available in direction of the tip of October,” stated the primary individual quoted above. He additional stated that the delay talked about within the JLF minutes wasn’t on account of this motive, however due to technical processes that wanted to be accomplished.

As per the minutes, Ernst and Younger, that’s operating the structured debt refinancing deal, stated there are 23 potential bidders for the telecom firm, 19 of which have signed non-disclosure agreements and acquired monetary data to higher choose the corporate.

The telecom tower sector, which appeared rosy in simply January this yr, has taken a flip for the more serious as consolidation amongst telecom operators appear extra imminent that imagined. Thought Mobile and Vodafone India are within the means of merging; Tata Teleservices is on the verge of shutting down; Reliance Communications and Aircel that had deliberate to merge are on the precipice of closure too as their deliberate merger got here undone on October 1.

Reliance Infratel had acquired a bid of Rs 11,000 crore from non-public fairness Brookfield in December 2016 and the ADAG group had stated it might be retaining 49% financial curiosity within the enterprise. Nonetheless, that valuation was contingent to a wi-fi take care of Aircel. Now that the Aircel deal is off, Brookfield is more likely to revalue RCom.

Reliance Communications, with a debt of close to Rs 45,000 crore, is at present present process strategic debt restructuring. The group has till December to agree on a decision to its debt cost. It had hoped to shut its transactions with Aircel and Brookfield by September-end.

GTL Infrastructure purchased Aircel’s telecom towers in 2010 for about Rs 8,000 crore, however development for telecom firms got here to a halt as a result of 2G airwave allocation rip-off that led to revoking of 122 licences. GTL Infra entered into company debt restructuring, then strategic debt restructuring below which banks transformed loans to shares, and hope to get better their cash via the sale of the corporate.

Supply hyperlink