The Manoj Tirodkar-promoted GTL is negotiating a one-time settlement (OTS) with lenders by which it will repay 60% of the outstanding debt, senior bankers told FE. However, since the repayment will be a staggered one rather than a lump-sum payment, it remains to be seen whether banks accept the proposal. The company has indicated to lenders it will repay its dues as and when it is able to monetise its assets.
In response to a query, GTL said it would repay R4,000 crore, adding that over the past five years it had paid more than R1,400 crore from its internal resources without any fresh borrowings. “GTL continues to engage with its lenders in identifying opportunities to monetise its businesses and non-core assets in its goal to further repay debt which cumulatively will mean a payment of R4,000 crore to banks,” the company said.
The company reported a net loss of R801 crore on the back of R2,069 crore in revenues in FY15 and a net loss of R1,350 crore against R300 crore in revenues in the December quarter of FY16.
As of March 2016, Global Holding Corporation owned 32.41% of the company, followed by Manoj Tirodkar at 11.82% while 20 banks collectively own 24.67%.
Lenders to the company include Andhra Bank, Bank of Baroda, Bank of India, Canara Bank, Punjab National Bank, Union Bank, IDBI Bank and Vijaya Bank.
According to two senior bankers, the company has said it plans to sell its operations, maintenance and energy (OME) management business for an estimated R850 crore to E2Energy and also divest a portion of the promoters’ holding in GTL Infra. “The company is looking for an external investor as well,” one banker said. Lenders are hoping that the launch of 4G services will make the towers of GTL Infra more attractive to manage.
The company’s board had approved the sale of its OME business, on a going-concern basis, by way of a slump sale on September 30, 2015.
Standard Chartered Bank, Mauritius, one of the unsecured creditors to GTL, had filed a legal case against the company seeking pari passu status in terms of sharing of security and cash flow with other CDR lenders. However, as per the CDR terms, CDR lenders cannot offer preferential treatment to certain lenders ahead of other lenders.
In its FY15 annual report, the company had said that the management is of the firm view that such events or conditions (legal proceedings) can be mitigated by the OTS plan for settlement of the outstanding debts of all lenders including CDR, ECB and NCD by sale of its business divisions, assets and investments.
GTL, part the Global Group, provides network services to telecom operators, OEMs and tower companies. The company’s CDR package was approved by lenders in December 2011. At the time, the company had a total debt of Rs 5,965 crore, according to GTL’s FY11 annual report. However, it was able to reduce its debt as some of it was converted into shares.