Viom Networks Ltd, the joint venture between Tata Teleservices Ltd and the Kanorias of Srei Group, is willing to acquire GTL Infrastructure Ltd — but only after the beleaguered tower company’s debt mountain is slashed through a restructuring process.
The deal, if it eventually happens, would also be a complete buyout, Sunil Kanoria, director of Viom Networks told DNA.
“We are now trying to understand what is the situation at GTL Infrastructure. Debt levels are very high there —reportedly around Rs12,000-13,000 crore — and therefore the banks are working out a corporate debt restructuring. Once we understand what is the overall debt level and what happens to it after the CDR, we would start our assessment. At current debt levels, a deal doesn’t make sense, otherwise things wouldn’t have been so difficult for them today,” Kanoria said.
Viom would assess whether the present cash flow can sustain the debt level post CDR.
“We have always been conservative with our finances and believe that business has to pay for itself. Sometimes valuations are based on how a business is expected to grow in the future. The way we look at valuation is to see how the present is reflected in it. If after the CDR package is finalised, the fundamentals of the business looks reasonably good then we would assess,” Kanoria said.
Kanoria cleared the air over the willingness of the Tatas in partnering with the GTL promoters. “The Tatas are OK with the deal as it would be full buyout. There will not be a scenario where GTL will continue as a shareholder. If there’s a buyout there are no issues. But the Tatas may not want them as a joint venture partner,” Kanoria said.
Viom Networks, previously known as Quippo-WTTIL, was formed out of demerger of Tata Teleservices’ mobile tower infrastructure and currently has strength of close to 40,000 towers.
Viom is 53% controlled by the Tatas. The Kolkata-based Kanorias, who are founders of Srei, hold about 27% while foreign institutional investors (FIIs) own the balance 20%.
IDFC Private Equity, Macquarie SBI, GIC Singapore, Oman investment Fund, Roaring Investments Pte Ltd, Geraldton Finance Ltd, and AMP Capital are some of the other existing investors while Srei Infrastructure now has a stake of 11% following the recent merger of Viom’s holding company with itself.
If the deal fructifies, it would be a case of the Kanorias being second time lucky. Viom had earlier bid for Aircel’s towers but were outbid by GTL.
It’s premature to comment. At this stage we are completely focused on building our business and taking all possible steps to protect the interest of lenders and share holders,” the GTL official said.
With 99.1% pledged, GTL promoters at lenders’ mercy
The spectre of sale of promoter shares by lenders have risen for Manoj Tirodkar, whose telecom infrastructure company GTL Ltd informed stock exchanges on Tuesday that nearly all of promoter’s shareholding in the company has been pledged - presumably with lenders.
“The company is working to protect all stakeholders’ interest including those of the lenders,” a GTL spokesperson said. About there being no more promoter shares left to pledge to make up for the sliding share prices, company said that it cannot speculate on which way the share prices will move.
On Tuesday, GTL shares fell 6% to close at Rs81.10 on the Bombay Stock Exchange. Share touched its 52-week low of Rs80.55 during intra-day trade on the same day.
Kingfisher Airlines is another well known name that recently informed exchanges that entire promoter shareholding has been pledged. Promoter holding for that company stood at 40% as per latest disclosures. Tata Coffee, where promoters hold about 57% is also in the same boat with all their shares being pledged.
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