GTL Infrastructure Said to Be in Talks for Debt Transfer

GTL Infrastructure Ltd. (GTLI), an Indian mobile-phone tower operator, is in discussions with lenders about the potential transfer of some of its debt to affiliate GTL Ltd. (GTS), said four people with knowledge of the matter.

Talks with the lenders are in early stages, and a deal is not likely before the end of March, one person said, asking not to be identified as the information is private. As part of any restructuring, GTL Infrastructure may also transfer assets to GTL, a network services company, two people said.

The transfer could be followed by a sale of GTL Infrastructure’s towers to pay down some of the remaining debt, three of the people said. Any arrangement between the two companies, controlled by closely-held Global Group, needs the approval of banks that restructured their debt last year, the people said.

“The news is highly speculative and incorrect,” Ramakrishna Bellam, a Mumbai-based spokesman for Global Group, said in an e-mailed response to questions.

GTL Infrastructure amassed 108 billion rupees ($2 billion) in debt by the end of March, partly a result of its 80.3 billion rupee acquisition of mobile phone transmission towers in 2010, according to company filings. GTL’s debt stood at 43.3 billion rupees at the end of March, its filings show.

With India’s mobile telecom companies slowing expansion of their networks, Global Group last year restructured 162 billion rupees of debt owed by GTL Infrastructure, GTL, and another unit called Chennai Networks Infrastructure Ltd. As part of that deal, banks converted some of their loans into GTL Infrastructure equity.

Merger Option

Lenders including Indian Overseas Bank and Bank of Baroda owned more than 46 percent of GTL Infrastructure at the end of November, stock exchange filings show.

GTL Infrastructure, which acquired 17,500 mobile-phone transmission towers from Aircel Ltd. in 2010, has a portfolio of over 30,000 towers, according to its website. With its shares down about 72 percent in the past year, the company has a market value of 7.8 billion rupees.

GTL, down about 48 percent in the past year, has a market value of 3.8 billion rupees. The company will add to its 7.7 percent stake in GTL Infrastructure after the debt and the asset transfer takes place, one person said.

GTL and GTL Infrastructure could also consider a merger if they don’t receive approval from lenders for a transfer of the debt, the person said.

To contact the reporters on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net; Anto Antony in Mumbai at aantony1@bloomberg.net

To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net; Philip Lagerkranser at lagerkranser@bloomberg.net

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