GTL Infra, IFCI reach settlement on promoter stake

Institution agrees to return 7.6% of company's stake back to promoter Manoj Tirodkar

GTL Infrastructure, the country’s fourth-largest telecom tower company, has reached a settlement with its lender, IFCI, with the latter agreeing to return 7.6 per cent of the company’s stake to promoter Manoj Tirodkar, taking his holding from 20 per cent to 27.6 per cent.

The return of stake to Tirodkar will help the promoter retain control, as his stake had got low enough to tempt a takeover attempt.

Tirodkar lost control over 18 per cent of GTL Infra’s stake after its subsidiary, Chennai Network, defaulted on a Rs 250 crore loan to IFCI in 2011. IFCI immediately invoked the shares pledged with it and sold part of it in the market to recover its loans. In return, GTL sued IFCI at the Delhi high court, saying IFCI did not give it a notice before it sold the shares. The court upheld GTL’s argument and the shares sold by IFCI were not transferred to the buyer.

GTL officials say in line with a corporate debt restructuring (CDR) plan approved by its lenders, IFCI had agreed to return the shares to the company. Chennai Network was acquired by GTL from Aircel for Rs 8,400 crore in July 2010. The company has now ceased to be a subsidiary of GTL Infra and has reported a loss of Rs 1,600 crore between July 2010 and March 2013.

GTL’s fortunes turned for the worse after its merger with RCom’s tower subsidiary, Reliance Infratel, fell through. Within months, the company’s shares tanked by a little over 80 per cent  and the company started defaulting on loans to its lenders. The two listed entities of the group, GTL Infra and GTL Ltd, fell sharply and the promoters began losing their grip over GTL Infra. GTL is now trading at Rs 14 on the BSE exchange, while GTL Infra’s shares are as low as a rupee each. GTL is also expected to get compensation of Rs 1,000 crore from Aircel, as the latter failed to provide a guaranteed business.

Aircel had promised to give Rs 17,000 crore of business to GTL Infra over five years.

Facing a tough telecom market, it failed to do so. The company now expects the industry’s fortunes to change with the permission for 100 per cent foriegn direct investment in the telecom sector and roll out of services by Reliance Industries.