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Friday, July 20, 2018

GTL INFRASTRUCTURE LIMITED:-GOOD DAYS A HEAD ?


GTL Infra lenders may sell loan to ARC 
By Sangita Mehta ET Bureau July 20 2018
Image result for gtl INFRAGold-loan


Mumbai: A consortium of lenders to GTL Infrastructure plan to sell their loans to the struggling telecom tower company to Edelweiss Asset Restructuring Company, which has offered cash payment of 60 per cent of the loan amount and an equity upside, two bank officials said. The lenders, led by Union Bank of India had sought bids for their Rs 4,000-crore loans to GTL Infra using the Swiss-challenge method, whereby details of an unsolicited bid is published and third parties are invited to better it. 

The base price set for GTL Infra loan book was an offer made by Edelweiss ARC a couple of months ago, the two officials said on condition of anonymity. “We did not receive any other offers in the auction, so we have decided to go ahead with the offer from Edelweiss ARC,” one of them said. “Each bank in the consortium is in the process of seeking approval from the board and we expect to close the deal by the month-end,” he said. Edelweiss ARC, the country’s largest asset restructuring company, has offered to pay Rs 2,400 crore in cash for Rs 4,000 crore of debt that has turned sour for most banks. As per the deal, lenders will continue to hold a majority stake of 63 per cent in the company. 

Banks had given mandate to Union Bank of India (UBI) to jointly sell the entire loan to attract a good offer. Senior officials of UBI and Edelweiss ARC declined to comment. GTL Infra is among the largeticket borrowers that could be dragged to bankruptcy court if lenders are unable to resolve its loans before August 31, as per an RBI circular. 
GTL Infra suffered heavy losses partly due to non-payment of dues by mobile service providers. The company has made a claim of Rs 1,704 crore from Aircel, which had filed for insolvency proceedings a few months ago. Lenders had about Rs 8,000-crore exposure in GTL Infra, which was reduced to half through strategic debt-restructuring scheme. The scheme, which is now discontinued, allows lenders to convert part of their loan to equity of the companies that are facing financial stress and at the same time allows banks to retain the account as a standard for 18 months, provided conversion happens while the account is a standard account. Banks had to sell their stake to new promoters within 18 months. On conversion of debt, lenders’ holding in GTL Infra stood at 65 per cent while promoter Manoj Tirodkar held 19.5 per cent stake. The balance equity stake is with the public. 
Lenders are keen to restructure the debt outside bankruptcy court since if the company is referred to bankruptcy court, in all likelihood, the equity will be written off. This means bankers would not get any upside if the company revives post restructuring. 



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