GTL and its unit GTL Infrastructure, the Indian telecom towers company, are reportedly looking to restructure Rs170bn (US$3.8bn) worth of debt, after the companies defaulted on repayments early July.
GTL has debts of about Rs60bn (US$1.35bn), while GTL…
GTL and its unit GTL Infrastructure, the Indian telecom towers company, are reportedly looking to restructure Rs170bn (US$3.8bn) worth of debt, after the companies defaulted on repayments early July.
GTL has debts of about Rs60bn (US$1.35bn), while GTL Infra has debts of Rs110bn (US$2.45bn), wrote reports.
Fitch Ratings said it downgraded GTL Infra’s national long-term rating to ‘BB+(ind)’ from ‘BBB-(ind)’ and simultaneously placed it on Rating Watch Negative (RWN).
In a release, Fitch wrote: “The downgrade reflects Fitch’s belief that GIL is facing liquidity constraints due to slower-than-expected tenancy ramp up on account of regulatory uncertainty in the domestic telecom industry and that its credit profile has deteriorated. The ratings also reflect the company’s increased interest expenses and delays in equity infusion which was scheduled for the financial year ended 31 March 2011 (FY11).”
GTL declined to comment on the speculation.
In late June, the group announced that it appointed SBI Capital Markets to help review its operations, including its financial performance and obligations. SBI Capital is expected to prepare a report on GTL and GTL Infra by the end of July.
At the time, the company also said it had postponed plans to raise up to US$300m from institutional investors to fund its expansion plans and repay existing debts, as reported back in March.
With this debt restructuring underway, it is speculated that a deal to merge GTL Infra with cellco and tower operator Viom Networks will now be put on hold.
In early July, it was reported that the two companies were looking to merge, in a transaction that would have created India’s second largest towerco, after Indus Towers, with about 70,000 towers. GTL Infra has about 32,500 towers, while Viom has 30,000.
