Towering ambitions crushed by debt, GTL Infra seeks a buyer

Via The Financial Express | Mar 19, 2015

From harbouring an ambition of creating India s largest telecom towers firm by acq
uiring Reliance Communications (RCom) towers in 2010, Manoj Tirodkar, chairman of
the loss-making and debt-laden GTL Infrastructure, is now looking to exit the b
eleaguered business altogether. GTL Infra s tower tenancy ratio of 1.50 is way low
er than those of its competitors like Viom Networks 2.25, Bharti Infratel s 1.93 an
d Indus Towers 2.0. In 2011, Global Holding Corporation the parent company of GTL
Infra and GTL approached the corporate debt restructuring (CDR) cell to recast
its loan burden of Rs 16,200 crore. Of this, the company has repaid Rs 4,200 cro
re and owes banks around Rs 13,000 crore (including principal and interest). GTL s
lenders, however, say that they are unaware of any move to bring external inves
tors on board. We have not been informed about the plans to find investors for th
e company but are not averse to the idea of a good strategic investor, a public s
ector banker who is part of the CDR cell said. He declined to be identified. The
banker added that they are generally informed of a potential investor only when
a deal is close to being sealed.
Another banker said that it will be a challenge for Tirodkar to find a buyer giv
en the group s overall debt burden and policy flip-flops that the telecom sector i
s prone to. He too declined to be identified. The competitive scenario with sever
al operators owning their own towers and capital-intensive nature of the busines
s also make it difficult to find suitable buyers, the second banker said. To put
things in perspective, while the company s current cash flows amount to around Rs
1,200 crore a year, it has to shell out as much as Rs 1,500 towards the payment
of interest to lenders. GTL Infra, which has about 30,000 towers in its portfoli
o, had accumulated losses to the tune of Rs 1,831 crore at the end of FY14, acco
rding to Capitaline data. Tirodkar, also the chairman of Global Holding, said th
at he was exploring various options to exit the telecom towers business and repa
y debtors. He added he is in talks with at least three potential investors who h
ave evinced interest in acquiring the group s telecom towers and equipment busines
s, though a deal is yet to be finalised.
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