Mumbai: GTL Infrastructure Ltd, the Mumbai-based telecom towers management company, said it had successfully restructured more than $300 million of zero-coupon foreign currency convertible bonds (FCCB) due on 29 November.
Bondholders approved the restructuring proposal at a meeting held in Singapore on Thursday, GTL said in a statement. Bondholders approved the restructuring of the outstanding amount of $319.3 million (the aggregate of the principal amount of $228.3 million and the redemption premium payable), the statement said.
Rahul Desai, group head (capital markets and investor relations), GTL Infrastructure, said it was one of the largest FCCB restructuring deals in India. “With this restructuring, our company will get another five years, that is till November 2017, to repay the bonds.”
FCCBs were restructured into new exchangeable bonds of A series (mandatory convertible bonds) of $111.74 million with a conversion price of Rs.10 per share and zero yield to maturity. Also, under the restructuring, Series B interest-bearing bonds of $207.55 million was created with a conversion price of Rs.10 per share for conversion within 60 days and Rs.12.64 per share afterwards with a yield to maturity of 5.812% per annum.
Manoj Tirodkar, chairman of GTL Infrastructure, said the successful completion of the restructuring of FCCBs and rupee debt with the support of the bondholders/lenders demonstrates their belief and conviction in the company.
“We can say it is the largest FCCB restructuring. Surely, it will help the company by postponing the repayment obligations and option to convert subject to future realistic earning potential,” Nirmal Gangwal, director at Brescon Corporate Advisors (P) Ltd, India’s leading distress debt resolution adviser.
Gangwal said bondholders are now looking to secure their repayment over a longer period of time.
“Considering the present economic situation it is a win-win solution. This event may encourage some more companies to restructure their FCCBs. However, future fund raising through FCCBs would be a challenge,” Gangwal said.
GTL Infras shares gained 6.78% to close at Rs. 8.35 on Thursday on BSE Ltd, while the benchmark Sensex lost 0.3%.