GTL promoters pledge 99% holding with lenders

GTL Ltd. | Telecommunication - Service Provider | Telecom | BSE: 500160 | NSE: GTL

20 Jul 2011 Evaluate

GTL pledged 99.06 per cent of its holding in the company with lenders. Global Holding Corporation, which has a holding of over 52 per cent, has pledged 50.5 million shares. Global Holding pledged 28.5 million more shares of GTL on July 4. Global Holding owned 50.98 million shares in GTL, out of which 50.50 million shares were now pledged with the lenders.

Promoters owned 52.53 per cent stake in GTL as of March 31, out of which 52.18 per cent was owned by Global Holding. The company has seen a sharp drop in revenues and cash flows due to the current squeeze in the telecom sector, which has triggered low capital expenditure, lesser spending, muted growth and a falling demand. While group firm GTL Infrastructure has a higher debt burden of Rs 10,000 crore in its books, it’s a lesser headache for lenders as the debt is a secured one, having an asset cover of one and a half times. But GTL Ltd is a bigger challenge, as the company has close to Rs 4000 crore leverage, most of which is unsecured. GTL infrastructure owns the assets and earns rental income and GTL sells the equipment and offers other services to operators. GTL has also made investments in GTL Infrastructure, and holds many of the bank guarantees.crack crack