At least five public sector banks, including Dena Bank and Indian Overseas Bank, have declared GTL as a non-performing asset (NPA), according to senior executives in the banks. Ashwani Kumar, chairman and managing director of Dena Bank, confirmed on Friday that the Mumbai-based company has not made payments towards its loans for more than 90 days.
The company has, however, denied any knowledge of the account being declared an NPA. “It may be noted that GTL Limited has not received any notice for its account becoming an NPA,” the company said in an email response.
Among the 17 lenders to the company are Bank of Baroda, Bank of India, Union Bank and United Bank of India, while the consortium leader is IDBI Bank. IDBI Bank is yet to classify the account as an NPA but a senior bank official clarified the bank was awaiting auditors’ comments on the company’s March quarter results. “It is true that cash flows are below the projected levels and it is also possible that the company has not been servicing the debt of some banks in the consortium,” a top-level IDBI Bank executive said. He added that the company had been asked to come up with a road map following the last joint lenders’ forum meeting.
In an email response, GTL stated that “following the implementation of the CDR (corporate debt restructuring) package, the projections related to revenue and EBITDA were unfortunately affected by certain force majeure events which were beyond the control of our group”.
The company has submitted a ‘negotiated settlement proposal’ to CDR (corporate debt restructuring) lenders, currently being considered, and the management says it hopes to monetise assets worth R3,000 crore to repay lenders. A settlement would result in the company exiting the CDR cell. At the end of FY15, GTL had a consolidated total debt of R2,147.3 crore and cash and cash equivalents of R160.16 crore, according to Bloomberg data.
Standard Chartered Bank Mauritius, one of the unsecured creditors to GTL, has 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. The matter is currently sub judice.
GTL, part of the Manoj Tirodkar-promoted 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 fund-based and non-fund-based debt of Rs 5,965 crore, according to GTL’s FY11 annual report.
The company has been able to reduce its debt as some of it was converted into equity and instalments paid to the banks. “Since then (CDR implementation) GTL Ltd has paid approximately Rs 2,000 crore to its lenders,” the company said.