Tata Tele may seek debt recast soon

Rajesh Kurup Mumbai | Updated on January 12, 2018 Published on June 23, 2017

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Meets bankers to rework ₹30,000 cr of debt, say sources

Tata Teleservices Ltd (TTSL) may soon approach its lenders to seek a restructuring of its ₹30,000-crore debt as part of the company’s plans to stay relevant in a highly competitive telecom market.

This would make the Tata Group company the second telecom firm after Reliance Communications (RCom) to seek debt restructuring.

According to sources close to the lenders, TTSL has met with bankers to restructure about ₹30,000 crore of its total ₹40,000-crore debt, which includes ₹8,000 crore of deferred spectrum payments.

When contacted, TTSL did not offer any comment. TTSL is also believed to have sought an extended maturity of 20 years for repayment, in line with the life of the licence and spectrum. In addition, the operator may have also sought a further loan of ₹5,000 crore for its capital expenditure requirements, sources added.

The consortium of lenders would be led State Bank of India, according to sources. However, this could not be independently confirmed.

The lead banker is expected to hold a Joint Lenders Forum (JLF) to consider TTSL’s debt restructuring plan.

Recently, Reliance Communications got a lifeline after its lenders gave it time till December to sell some of its assets to pare its debt. The Joint Lender Forum on Friday gave its approval to RCom’s plan, which includes selling the tower assets and a merger of its wireless business with Aircel. Both TTSL and RCom have been hit by the intense competition in the telecom sector, especially since the entry of Reliance Jio.

TTSL’s net worth eroded by ₹11,653 crore at the end of the financial year ended March 2017 and its loss widened to ₹4,617 crore for FY17, from a loss of ₹2,023 crore the year before. Banking sources, however, said they were not too worried about the TTSL debt since the company belongs to the Tata Group.

“Tatas continues to be a marquee customer as far as bankers are concerned. Besides, the tower deal to sell stake in Viom Networks has helped TTSL shore up its finances to meet immediate requirements. The debt restructuring could be a precursor to the Tatas selling the telecom company to an incumbent player,” said an analyst.

Published on June 23, 2017
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