Indian mobile operator Aircel is reportedly considering buying back towers sold to towerco GTL Infrastructure in 2010 for US$1.8bn.
Talks are currently at a preliminary stage, the Economic Times cited a person familiar with the matter as saying.
As…
Indian mobile operator Aircel is reportedly considering buying back towers sold to towerco GTL Infrastructure in 2010 for US$1.8bn.
Talks are currently at a preliminary stage, the Economic Times cited a person familiar with the matter as saying.
As part of its 2010 agreement to sell about 17,000 towers to GTL Infra, Aircel, which is majority-owned by Malaysia’s Maxis, agreed to take up 20,000 slot tenancies on the towers.
However, in the wake of investigations in late 2010 into India’s 2G spectrum scandal, Aircel, like many local telcos, capped its spending.
The newspaper cited its source as saying it may be better for the indebted Aircel to buy back the towers than pay penalties for not adhering to its commitments to take up the slot tenancies, noting that its agreement to do so was based on forecasts made before the 2G scandal.
Aircel, which reportedly has Rs240bn (US$3.97bn) in debt, has taken out more than Rs60m (US$993,227) in convertible shareholder loans over the past eight months, the report cited a second source familiar with the GTL Infra talks as saying. The operator has used the funds to pay some of the Rs30m (US$496,607) due to vendors and GTL Infra, which is also highly indebted, according to the source.
Meanwhile, a person familiar with GTL Infra’s plans reportedly said the company would be more likely to sell its entire portfolio of approximately 32,000 towers and not just the 17,000 former Aircell towers. GTL Infra’s creditors would need to approve such a move, the source reportedly said, adding that a sale of the entire company would also require lenders’ consent. The towerco and parent GTL reportedly received approval from their lenders in late 2011 to restructure about Rs160bn (US$3bn) in debt, after allegedly defaulting on repayments in early July 2011.
Earlier this week, Maxis reportedly denied charges brought against it by India’s Central Bureau of Investigation (CBI) concerning its purchase of Aircell in 2006. In a statement, the Malaysian operator said it had not been served with a copy of the charge sheet but “categorically denies all allegations of any wrongdoing”.
Today’s report cited a source as saying Aircel may take out more loans when the dispute between Maxis and the CBI is resolved.
Neither Aircel nor GTL was immediately available for comment.
