India’s GTL Infrastructure and Reliance Infratel, the tower subsidiary of Reliance Communications, will convert about Rs. 60bn (US$1.3bn) of promoters’ loans into equity, according to media reports.
The companies, which announced an US$11bn merger at the…
India’s GTL Infrastructure and Reliance Infratel, the tower subsidiary of Reliance Communications, will convert about Rs. 60bn (US$1.3bn) of promoters’ loans into equity, according to media reports.
The companies, which announced an US$11bn merger at the end of July, will also issue new shares worth Rs. 47bn (US$1bn) to investors, wrote the Economic Times reported.
The report explained that the deal, expected to be announced in the next few weeks, would reduce the amount of debt transferred to the new entity. GTL will convert about Rs. 20bn (US$430m) of debt into equity prior to the combination while Reliance will convert the remaining loans.
The combined entity, comprising more than 80,000 towers, is expecting to generate high levels of business by leasing out its infrastructure to India’s telecom operators. GTL was advised on the merger by Standard Chartered, which along with SBI Capital Markets agreed to arrange a US$4bn-US$5bn debt package to finance the deal.
