GTL Infra seeks valuation of ₹11,000 cr
MUMBAI: A stake sale in GTL Infrastructure Ltd could see the telecom infrastructure firm valued at more than ₹11,000 crore, two people aware of the development said. The company is likely to be valued at about 11 times its current Ebitda (earnings before interest, tax, depreciation and amortisation), the people said on condition of anonymity.
The stake sale process, which began last month, is benchmarked around the valuation of recent transactions in the telecom space as well as the improved tower tenancy ratios of the company’s 28,000 odd towers after several years of revenue and tenancy decline because of cancellation of telecom licenses and intermittent freezes on capital expenditure by telecom operators, the people cited above said.
In FY17, GTL Infra and Chennai Network Infrastructure Ltd reported a combined revenue of ₹2,286.05 crore against ₹2,145.51 crore in the previous year.
The stake sale, which is part of the company’s strategic debt restructuring (SDR) programme invoked by its lenders in September, could also see GTL Infra founder and chairman Manoj Tirodkar’s Global group exit the company that he founded in 2004. According to the latest corporate filings, Global Group is left with a stake of close to 22% in the merged entities of GTL Infra and CNIL, which houses 17,500 towers acquired from Aircel Ltd in 2010. The merger was approved by the boards of both companies in April. As part of the SDR programme, a consortium of staterun banks have converted the company’s outstanding loans worth ₹4,492 crore into equity.
The lenders who currently own more than 51% stake will have to sell at least 26% of their holdings to a new buyer by next year for the SDR process to succeed. Under RBI guidelines, the conversion of debt to equity under SDR should happen within 210 days of the review and reference date and the induction of a new investor should take place within 18 months from the date.
While an email query sent to Union Bank of India, which is among GTL Infra’s largest shareholders, remained unanswered, people cited above said lenders are yet to take a final decision on Tirodkar’s proposal.
“The SDR rules stipulate lenders to sell at least 26%, however, to enhance shareholder value and enable the lenders and minority shareholders unlock better value of their investments, should it be required, promoters are willing to participate in the consolidation process,” a spokesperson for GTL Infra said in response to a query on Global Group’s plan to exit GTL Infra.