press trust of india
Mumbai, Jan 4: Leading independent telecom tower operator GTL Infra Thursday said the ongoing mergers in the industry will lead to an idling of over 15 per cent of its masts in use, for which it has sought Rs2,000 crore from the telcos for early exits of tenancies. It has sought Rs2,000 crore in compensation for exiting or reducing their tenancies before the tenor following mergers, GTL told exchanges in a regulatory filing Thursday.
In an exchange filing, the Mumbai-based company fighting a debt overhang said the Rs2,000 crore will be used to pare its debt by half to Rs2,000 crore and will also lead to a gain of Rs150 crore towards debt servicing annually.
“The company will be pursuing all possible legal avenues, civil and criminal, to recover its rightful dues from the operators concerned, all of which will be used to repay the debt.
“Based on the exit notices received thus far, the company has already estimated claims of over Rs 2,000 crore which on receipt can be utilized to reduce debt,” GTL informed the exchanges Thursday.
It can be noted that companies can now drag their clients to National Company Law Tribunals (NCLTs) to get their money and at least one of GTL’s clients has been dragged into the tribunals by its vendors.
The company, which is in corporate debt restructuring since September 2016, has a secured debt of Rs4,193 crore now and its debt conversion was completed in April 2017.
This apart, GTL also restructured its optionally convertible FCCBs since the CDR which saw its forex debt coming down to Rs560 crore ($86 million) from Rs1,442 crore.
It expects as much as 8,600 of its 50,845 towers in service to be idle following the massive consolidation in the industry arising from the Vodafone-Idea merger, and those Airtel buying Tata Teleservices and Telenor apart from the adverse consequences on account of withdrawal of Aircel- Reliance Communications merger.
So far it has received notices from Tata Teleservices to vacate 2,230 towers, RCom (1,327) and Sistema (430), totaling 3,987 towers. But it expects another 6,600 more vacation notices taking the overall towers to left to idle at 8,600 on completion of these mergers. And in a worst case scenario it fears a tenancy impact over the next 12-18 months to be 9,000-11,000.
The company’s total tenancy base as of end March 2017 stood at 50,845. This was initially projected to reach 56,000 by March 2018.
Mergers of Vodafone-Idea and Airtel and Telenor alone will leave 2,589 tenancies currently out of lock in.
In the regulatory filing the company also noted that the second half of FY18 also saw some significant events which were beyond its control such as Tata Teleservices not transferring its contracted tenancy obligations to Airtel as part of the merger and has consequently issued exit notices for its tenancies; and RCom, including Sistema shutting down their wireless businesses.
