NEW DELHI: GTL Infrastructure has lowered its revenue and earnings before interest, tax, depreciation and amortisation, by 12 per cent and 28 per cent respectively for the year ending March 2018, hurt by the impact of Aircel filing for bankruptcy, which would reduce tenancies by half from its earlier estimate given in December 2017.
In a statement to stock exchanges on Thursday, tower firm GTL Infrastructure (GTL Infra) said that if Aircel were to wind up completely, it would lose all of Aircel’s 23,727 sites, which would cut its total tenancy base to 26,637 compared to 51,587 in December 2017.
“Given that Aircel contributed 43 per cent of the revenue of the company as on March 2017, the impact of Aircel’s insolvency will be materially adverse for the company,” said the Mumbai-based company which sets up towers providing connectivity to mobile phone companies and earns monthly rentals from each.
Aircel, which is GTL’s largest customer, filed for bankruptcy on March 1, and on Thursday its petition for insolvency was accepted by the National Company Law Tribunal.
“If Aircel were to become insolvent and consequently terminate contractual arrangements for all tenancies, the company’s dues which would have been recoverable from Aircel for the remainder of the contractual term would be Rs 12,791 crores (including the six circles),” GTL Infra said. Additional dues outstandings towards infrastructure provisioning fees and past settlements amount to over Rs 384 crore.
But the company cautioned its shareholders that it may not get any money since it was an unsecured lender and hence came much after secured banks or lenders of Aircel, in the priority list for recovering dues.
Revenue for the fiscal ending March 2018, is expected to be Rs 2,267 crore, with an annualised run rate of Rs 1,325 crore, against the earlier estimated outlook of Rs 2,600 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) is likely to be around Rs 978 crore, far lower from the earlier estimate of Rs 1,350 crore.
GTL Infra added that it will be re-negotiating its arrangements with existing vendors and taken steps of realignment of debt with revised cash flows, including reduction in fixed costs, including wages, electricity and diesel charges, operations and maintenance charges and ground rent, with its remaining customers – Vodafone, Idea, Reliance Jio, Bharti Airtel and BSNL.
“These steps will enable the Company to remain EBITDA positive during the turn-around phase,” it said, adding that it expected to add around 4,200 tenancies from the continuing operators during this financial year.
GTL Infra, which opted for strategic debt restructuring (SDR) in 2016 and is itself up for sale, added that its lenders are currently examining the contours and implications of the Revised Resolution Framework and exploring options to realign the debt with the revised cash flows, after the Reserve Bank of India withdrew all SDR schemes.
The lenders are exploring the sale of the company’s debt to asset reconstruction companies, securitization companies, non-banking financial companies and other eligible buyers, GTL Infra said.
