National Asset Reconstruction Company of India (NARCL), the bad bank promoted by the government, has withdrawn its offer to acquire the debt of GTL, on the grounds that it would not be able to match lenders’ expectations, said two people aware of the development.
NARCL had given a conditional offer to acquire GTL loans a fortnight ago. It offered ₹360 crore if the debt was acquired while the company was outside insolvency proceedings. However, the offer would be ₹100 crore if the bankruptcy court admits it for insolvency proceedings during the interim period.
“Lenders informed officials of NARCL that they are not willing to accept the offer, not only because it is too low but also because it is conditional,” said a senior official involved in advising NARCL.
Lenders also informed NARCL that they would not sell the loan below ₹550 crore since the liquidation value itself was about ₹540 crore, the people said.
On Monday, NARCL informed lenders that it would not be in a position to give an improved offer and had thus withdrawn GLT from its list of companies to acquire, the people cited above said.
Canara Bank has filed a petition with the National Company Law Tribunal to admit the company for corporate insolvency.
According to the company’s annual report, it had ₹4,383 crore in borrowings at the end of fiscal 2022 against ₹4,881.9 crore a year earlier. “The reduction in borrowing is on account of the appropriation of the amount realised towards the sale of invoked shares of GTL Infrastructure and its promoters’ holdings by lenders against the rupee loans,” the annual report said.
The ₹360 crore offer by NARCL is likely on loans of ₹3,000 crore even though the company had a debt of over ₹4,300 crore. This is because NARCL does not plan to acquire loans from Standard Chartered Bank and JM Financial ARC, which are part of the consortium of lenders. It would also not acquire ₹707 crore in external commercial loans raised by GTL.
GTL’s sister concern, GTL Infrastructure, owns and operates 26,000 telecom towers in the country’s 22 telecom circles. It offers services to all telecom operators: BSNL, MTNL, Vodafone Idea, Bharti Airtel and Reliance Jio. GTL Ltd is the network operator and maintenance service provider for GTL Infra.
