GTL promoter Tirodkar, ICICI Bank talk peace

MUMBAI: Troubled GTL promoter Manoj Tirodkar and ICICI Bank are discussing a settlement after the latter opposed merger between the Mumbai-based group's telecom tower arms, GTL Infrastructure, and Chennai Network Infrastructure (CNIL). India's largest private sector lender wants to be "consulted" before the companies proceed with the proposed merger, which has already received the shareholder nod.
All other lenders have approved the merger that will boost the beleaguered group's corporate debt restructuring process currently underway.People advising the promoter have blamed rivals with vested interests for the heavy battering of the group's listed stocks in recent months, as well for the woes with lenders.
Last week, ICICI Bank took 29.3% stake in the telecom infrastructure group's flagship GTL converting pledged shares into equity after the stock tanked. ICICI Bank does not have any direct exposure to the two merging tower firms, but cited an unspecified interest in CNIL to raise the latest objection.
GTL Infra routed last year's Rs 8,400 crore acquisition of Aircel towers through CNIL. The amalgamation scheme envisages an exchange ratio of one equity share of GTL Infra for every four equity shares of CNIL. The promoter stake in the combined tower entity will be at around 60% if the merger goes through. This would provide the promoter with flexibility in debt restructuring as well as in exploring a strategic merger with a rival tower company.
The combined entity, with a balance sheet of Rs 16,500 crore, may throw up better cash flow and bring out operational synergies, which might bring some relief to the anxious lenders and minority shareholders, said one of the lenders.
Sources said ICICI Bank didn't agree to the amalgamation scheme as it felt it might not be in a strong position in the combined entity. The issue, however, is being sorted out with the promoter, sources said, adding that a merger will be the best option for all parties considering the financial situation at GTL Infra. The company has debts to the tune of Rs 10,000 crore.
An ICICI Bank spokesperson declined to comment. GTL, too, offered no comments when contacted.
Tirodkar's promoter stake in the two listed firms GTL and GTL Infra is routed through common investment vehicles. In addition, GTL is also a shareholder in the tower firm GTL Infra. Tirodokar's current stake in GTL stands at 22%, and at 38% in GTL Infra after lenders ICICI Bank and IFCI converted pledged shares into equity in these companies.