GTL lenders agree to sell off firm’s assets2 min read . Updated: 20 Mar 2018, 01:54 AM IST
GTL will be able to sell its assets now, but the company will have to first get the consent of its corporate debt restructuring (CDR) lenders
Mumbai: Lenders to GTL Ltd have agreed to a sale of assets of the company, which will be divided among them under an agreed formula, in a relief for the telecom infrastructure company that was on the brink of liquidation.
On Monday, all the parties including Mumbai-based GTL, its offshore lender Standard Chartered Bank Mauritius, which had filed a winding-up petition on behalf of non-convertible debenture holders, and a consortium of 17 banks led by the IDBI Bank filed the settlement in court.
GTL will be able to sell its assets now, but the company will have to first get the consent of its corporate debt restructuring (CDR) lenders.
“The petitioner No.1 (Standard Chartered Bank Mauritius) shall be entitled to its share of 24.83% of the proceeds of any one-time settlement as agreed upon in the meeting of the joint lender forum dated 4 December 2015 for the purpose of repaying the outstanding debt owed by the respondent (GTL Ltd) to its creditors," said the parties in their consent terms filed in the court, a copy of which was reviewed by the Mint.
It further added that “the petitioners hereby agree to allow and support the respondents to take necessary steps to divest the respondent’s assets and investments at such prices as to be able to recover maximum value for such assets and investments towards repayment of settlement amount."
The lenders will now share the ratio of the sale proceeds as per the one-time settlement (OTS) agreement between all the parties. Company’s joint lender forum (JLF) was discussing the settlement formula for a long time and now parties have reached a settlement.
Standard Chartered Bank Mauritius had filed a winding-up petition against the Manoj Tirodkar-promoted company in January 2015 for defaulting over dues of over Rs1,858 crore.
GTL had issued Rs1,400 crore of non-convertible debentures in 2010 in two tranches of Rs700 crore each. An NCD is a long-term financial instrument used to raise funds that usually offers a higher rate of return since it is unsecured and not convertible into equity.
However, GTL’s secured creditors comprising around 17 lenders including the Indian subsidiary of the Standard Chartered Bank challenged the winding-up petition arguing in any such event, they will have first right on the proceeds since they are secured lenders. The company owed over Rs3,345 crore to the consortium led by IDBI Bank Ltd at the time the dispute.
An email query to IDBI Bank Ltd did not elicit any response, while Standard Chartered Bank declined to comment on the development. “The parties have agreed to settle matters outside court in an amicable manner," said a GTL spokesperson in response to Mint’s detailed email query.
When contacted, Nishit Dhruva, managing partner and Prakash Shinde, partner of law firm MDP Partners, who are representing the consortium, confirmed the development but refused to divulge more details. Law firm Trilegal is advising offshore lenders in the matter.