GTL Infra jumps 16% as board looks to cut debt via SDR

NEW DELHI: Shares of GTL Infrastructure surged nearly 16 per cent in Wednesday’s trade after the board of the debt-ridden telecom tower company said it would offer its lenders an option to convert existing debt into equity and become majority shareholders.

This is to reduce the complexity of its borrowing and secure a suitor, two people familiar with the details told ET. Following the development, the stock rose 15.73 per cent to hit a high of Rs 3.31 on BSE.

In a regulatory filing to BSE, the company said it would soon reach investors over the course of this week. The move involves lenders and promoters converting Rs 3,300 crore of their Rs 8,200 crore debt into equity at par, or Rs 10 per share, in GTL Infrastructure. This would give the lenders a 60 per cent stake in the company and dilute the promoter stake to 27 per cent.

A banker familiar with the matter told ET that GTL Infrastructure has two potential buyers bidding between Rs 8 and Rs 10 a share with a guaranteed 80 per cent in the company with no legally questionable debt. He said the SDR process would take around a year to complete. "By then, operating profit should grow nearly 40 per cent given the turnaround in the telecom tower company in last six months."