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GTL to hike stake in telecom tower arm

An Open Offer Expected In Two Months To Be In The Range Of Rs350-400/Share.

THE promoters of network services provider GTL are keen to increase their stake in the group’s telecom towers arm GTL Infrastructure (GIL). They will soon make an open offer to GTL shareholders as a higher stake in GTL will increase their exposure to GIL, sources told ET.
“GTL promoters are looking at hiking their equity from 43.29% to 68.29%. An open offer is expected in the next one or two months. It is likely to be in the range of Rs 350-Rs 400 per share,” said sources. GTL’s promoters are represented by Global Holding Corp (GHC), owned by Manoj Tirodkar. GAHC owns 43.29% in GTL and is keen on acquiring another 25% in the company. Mr Tirodkar declined to comment.
This is the sixth time that GTL promoters are increasing stake in the last two years. The promoters have been increasing their equity stakes through a combination of creeping acquisition (acquiring less than 5% equity) and open offer (asking investors to tender shares). The promoters had a 26% holding in GTL in March 2006, which has now increased to 43.29%. In the process, the promoters have spent Rs 400 in raising their stake in the company.
During the current financial year too, promoters acquired 4.02% in GTL in two transactions. GIL got listed on the Bombay Stock Exchange and the National Stock Exchange in November 06. As a part of the demerger process, the shareholders of GTL received one share of GIL for every share of GTL. Business as well as acquisition opportunities are increasing for GIL as operators are hiving off telecom towers and outsourcing them to independent tower companies like GIL.
GTL scrip closed at Rs 218 on Monday, down 4.75% over the previous close. GIL was up 0.12% to Rs 42.40 and is now valued at nearly Rs 4000 crore.GTL has a current market capitalisation of Rs 2075 crore. GTL’s stake in GIL is valued at around Rs 1600 crore. “There is a lot of hidden value in GIL, which is not being reflected in the GTL balance sheet. After the open offer, promoters will be able to have a bigger equity share in GIL,” said sources. GIL has also joined hands with IDFC Project Equity to form a special purpose vehicle (SPV) to pursue acquisitions and strategicinvestments into telecom tower infrastructure companies being hived off by operators and other independent tower companies.
BIGGER VALUE

• GTL’s promoters are represented by Global Holding Corp (GHC). GHC owns 43.29% in GTL and is keen on acquiring another 25% in the company

• This is the sixth time that GTL promoters are increasing stake in the last two years

• The promoters have been increasing their equity stakes through a combination of creeping acquisition and open offer

• The promoters had a 26% holding in GTL in March 2006, which has now increased to 43.29%

• The promoters have spent Rs 400 in raising their stake in the company