GTL Infrastructure said on Tuesday it has set up a committee to restructure its outstanding dollar convertible bonds due in November this year, sending it shares up as much as nearly 20 percent.
The company, which sets up transmission towers for telecom operators, has about $228 million worth of foreign currency convertible bonds maturing on November 29, according to Thomson Reuters data. GTL Infra will have to redeem or restructure the convertible bonds because of a sharp slump in its shares.
The equity conversion price of the zero-coupon bond, which was launched in 2007, was fixed at Rs 53.04 a share. GTL Infra stock ended at Rs 9.40 on Tuesday, up 14.6 per cent on the day after the announcement on its restructuring.
A sharp economic and corporate growth slowdown, weakening of the rupee that hit record lows last month and a plunge in stock values have made the debt obligation very costly for some Indian companies. Indian companies together face convertible bond redemptions of nearly $5.5 billion this year.
Many of them including Moser Baer, which makes floppy diskettes and computer peripherals, and information technology (IT) services provider Subex are looking to restructure their convertible bonds.
GTL Infra said on Tuesday the company has set up a committee to "negotiate and finalise" the terms for restructuring of the dollar bonds. The committee's decision will be subject to the central bank and other regulatory authorities approval, it said.
Fitch Ratings in a report in February named GTL Infra as one of seven Indian firms, with maturing convertible bonds in 2012, that are likely to restructure with "significant distressed debt exchange" features due to poor credit profile.
GTL Infra has posted net loss for the last three consecutive years, according to Thomson Reuters data. The company's stock has fallen 78 per cent since early last year amid concerns about its ability to meet its debt obligations.
