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GTL Infrastructure cuts financial outlook after Aircel files for bankruptcy

March 09, 2018

GTL Infrastructure has lowered its revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) by 12 per cent and 28 per cent respectively for the year ending March 2018, hurt by the impact of Aircel filing for bankruptcy, which would reduce tenancies by half from its earlier estimate given in December 2017.

In a statement to stock exchanges, tower firm GTL Infrastructure stated that if Aircel were to completely close down operations, it would lose all of Aircel’s 23,727 sites, which would cut its total tenancy base to 26,637 compared to 51,587 in December 2017.  It stated that given that Aircel contributed 43 per cent of the revenue of the company as on March 2017, the impact of Aircel’s insolvency would be materially adverse for the company. Aircel’s petition for insolvency was accepted by the National Company Law Tribunal on March 8, 2018.

GTL Infrastructure stated that if Aircel were to become insolvent and consequently terminate contractual arrangements for all tenancies, the company's dues which would have been recoverable from Aircel for the remainder of the contractual term would be Rs 127.91 billion (including the six circles). Further, additional dues outstanding towards infrastructure provisioning fees and past settlements amount to over Rs 3.84 billion. But the company cautioned its shareholders that it may not get any money since it was an unsecured lender and hence came much after secured banks or lenders of Aircel, in the priority list for recovering dues.

The company added that it will be re-negotiating its arrangements with existing vendors and taken steps of realignment of debt with revised cash flows, including reduction in fixed costs, including wages, electricity and diesel charges, operations and maintenance charges and ground rent, with its remaining customers - Vodafone, Idea, Reliance Jio Infocomm Limited, Bharti Airtel and Bharat Sanchar Nigam Limited. These steps will enable the company to remain EBITDA positive during the turn-around phase.

GTL Infrastructure, which opted for strategic debt restructuring (SDR) in 2016 and is itself up for sale, added that its lenders are currently examining the contours and implications of the revised resolution framework and exploring options to realign the debt with the revised cash flows, after the Reserve Bank of India withdrew all SDR schemes.The lenders are exploring the sale of the company’s debt to asset reconstruction companies, securitisation companies, non-banking financial companies and other eligible buyers.


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