Edelweiss ARC, Oaktree to buy GTL’s Rs 4,000 crore dues to lenders

Edelweiss Asset Reconstruction Company has *teamed up with US-based alternative investment* manager Oaktree Capital to *buy Rs 4,000 crore* which telecom tower company GTL Infrastructure owed a consortium of lenders in a transaction completed before September-end. However, not all lenders have sold their loans to the ARC. Just before this deal was sealed, Canara Bank took GTL Infra to the National Company Law Tribunal (NCLT) under the insolvency and bankruptcy code (IBC) hoping to recover more. The company owes Canara Bank Rs 1,000 crore. Edelweiss, along with Oaktree and some other US investors like Bank of America-Merrill Lynch, bought about 90 per cent of the total loans due to lenders paying Rs 2,400 crore in cash which represents about 60 per cent of the value of the loan, Edelweiss ARC chief executive officer RK Bansal said. Of the Rs 2,400 crore invested to buy GTL Infra’s loans, 15 per cent has been put in by Edelweiss while the rest has been invested by foreign investors, led by Oaktree.

Purchase of this debt makes Edelweiss a creditor to GTL Infra and hence making it a party to the NCLT proceedings against the company initiated by Canara Bank. However, Edelweiss is confident of attracting a good price for GTL’s telecom infrastructure. We may have to invest in the company initially to ensure that some dues are paid and the towers are in running condition. After that we expect demand for this company because, with the expansion of the telecom business, both new and old companies will need a good tower network, Bansal said talking of the logic for loan acquisition. GTL Infra, with 28,000 towers across all 22 Telecom Circles in India, is one of the largest independent tower firms. The aggressive expansion of Reliance Jio forced a consolidation in the telecom sector. In April, Bharti Airtel, Idea Cellular and Vodafone Group announced an agreement for the merger of Indus Towers and Bharti Infratel to create the largest mobile tower operator in the world outside China with 163,000 towers. GTL’s loans were earlier restructured under a strategic debt restructuring programme through which its Rs 8,000-crore loan exposure was reduced to half.

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