)
GTL Infrastructure, India’s fourth largest telecom tower company, has reached a settlement with its lender IFCI with the institution agreeing to return 7.6% of company’s stake back to the promoter Manoj Tirodkar thus taking his stake from a meagre 20% to 27.26%.
The return of stake back to Tirodkar is important as it will help the promoter to retain control over the company as his stake fell to dangerously low level thus becoming a sitting duck for a takeover attempt.
Tirodkar lost control over 18% of GTL Infrastructure’s stake after its subsidiary Chennai Network defaulted to a Rs 250 crore loan to IFCI in 2011. IFCI immediately invoked the shares pledged with it and sold part of it in the market to recover its loans In return, GTL sued IFCI in the Delhi High Court saying IFCI did not give it a notice before it sold the shares.
The court ruled in favour of GTL saying IFCI cannot sell pledged shares in the market without giving a notice to the company. The shares sold by IFCI was not transferred to the buyer.
GTL officials say as per a corporate debt restructuring (CDR) plan approved by its lenders, IFCI has agreed to return the shares back to the company in return of shares in Chennai Network. Chennai Network, the telecom tower company, was acquired by GTL from Aircel for Rs 8,400 crore in July 2010. The company has now ceased to be a subsidiary of GTL Infrastructure and has reported a loss of Rs 1,600 crore between July 2010 and March 2013.
GTL’s fortunes turned for worse after its merger with RCom’s tower subsidiary Reliance Infratel fell through. Within months, the company’s shares tanked by over 80% and the company started defaulting to loans its lenders. The two listed entities of the group GTL Infra and GTL Ltd fell sharply and promoters losing their grip over GTL Infrastructure.
GTL is now trading at Rs 14-levels on the BSE while GTL Infrastructure’s shares are as low a Re 1 a share.
GTL is also expected to a get compensation of Rs 1,000 crore from Aircel as the latter failed to provide the guaranteed business. Aircel has promised to give Rs 17,000 crore of business to GTL Infra over a five year period. But with Aircel itself facing a tough telecom market, it failed to give the business to GTL Infrastructure which had bought equipment to service Aircel’s business which never came. Hence, the compensation.
But the company is now expecting the industry’s fortunes to change with 100% FDI in telecom sector and roll out of services by Reliance Industries.
