Tower company GTL Infrastructure Ltd (GTL Infra) and its associate Chennai Network Infrastructure Ltd (CNIL) are in advanced stages of discussions to refinance its residual ₹4,800-crore debt, a move that will save ₹200 crore in interest costs per annum. GTL Infra is also in the process of getting a credit rating to get the “finest” interest rates and lending terms.
The company is in talks with four global banks – two European, one Australian and a US-based – to underwrite the refinancing at 3-4 per cent lower than the existing contractual interest rates. The deal is expected to be inked within two-three months, sources close to the development told BusinessLine .
“GTL Infra is in the process of getting lenders’ and regulatory approvals for the refinancing, and expects to complete it ahead of its investor induction process as part of the Strategic Debt Restructuring (SDR),” a source said. The refinancing of the loan will be used to payout the entire Indian banks’ and institutions fully, the source added.
When contacted, company officials declined to comment.
GTL Infra, which went in for an SDR in 2016, has now made a turnaround with it increasing its revenue to ₹2,286 crore in FY17 from ₹1,008 crore in FY11.
Its revenue is likely to be ₹2,600 crore in FY18 as per the annual report. Further, its EBIDTA rose to ₹1,122 crore with about 50 per cent margin. At the time of CDR in December 2011, GTL Infra and CNIL had a debt of ₹13,318 crore, which stood at ₹10,100 crore in April 2017. Post SDR in 2017, the debt has reduced to ₹4,841 crore. It had initially issued bonds worth $300 million, with a majority of it converted into equity, with $86 million outstanding.
The company is expected to clock an EBITDA of ₹1,350 crore in FY18, according to its annual report. Its current set of lenders – including 23 banks and institutions — hold 51 per cent stake in the firm.
The improvised EBITDA and annual savings of ₹200 crore in interest outflow is likely to enhance the equity value to the existing set of lenders, who are also shareholders.
The lenders include SBI, Union Bank, Bank of Baroda and Axis Bank among others.
Net debt“The net debt of the company is expected to be below ₹3,800 crore by March 2018 on the basis of cash and revenue being generated. The debt to equity ratio post SDR in FY18 would be nearly 3.17, compared with a global benchmark of 5.9, on expectations of the company raising ₹1,350 crore EBITDA and ₹200 crore reduction in interests,” another source said.
Post restructuring the interest coverage ratio will become 3 (against industry average 1). Given the loan tenure will be for 10 years with bullet repayment on maturity and savings of ₹200 crore per annum, GTL Infra also has a cushion against likely drop in tenancies that might take place due to ongoing consolidation in telecom operator space.