A month after it called off talks for a merger with Reliance Infratel, GTL Infra is working on a partnership with Chennai Network Infrastructure Ltd (CNIL) to raise $1 billion to deleverage the company. GTL Infra eventually plans to rope in a strategic minority partner.
CNIL is the special purpose vehicle created to buy the 17,500 telecom towers from Aircel earlier this year. GTL Infra and its group companies had put in Rs 3,600 crore equity for the acquisition while the residual Rs 5,000 crore was raised through debt. GTL Infra alone had pumped in Rs 1,850 crore as its contribution to the equity infusion.
Post merger, GTL Infra is planning to raise $300 million by diluting close to 12 per cent stake in GTL Infra via American depository receipts (ADRs).
The merger would also create GTL Infra treasury stocks worth Rs 1,850 crore, representing close to 18 per cent of the paid-up equity of the company that will subsequently be divested to an independent strategic tower company or a sovereign fund. The company plans to raise close to Rs 2,200 crore through the strategic partner.
The GTL Infra management said it is premature to talk specific names. GTL is already partnering leading Abu Dhabi sovereign fund Mubadla for a $1.2 billion bid for Saudi Telecom’s tower assets.
GTL had raised $300 million via FCCBs in 2007. Almost $100 million is already been converted into equity. The remaining FCCBs are likely to get converted by November 2012 and is expected to bring in another $200 million. Upon full conversion, it will lead to an eight per cent dilution of equity.
Post restructuring, the company will also see a total equity infusion of close to Rs 7,900 crore. The current debt on GTL Infar’s books stands at Rs 9,000 crore. The company, therefore, will get the cushion to raise more debt for their organic and inorganic growth opportunities.
