GTL Infrastructure acquires unit of Essar Group - Sources

GTL Infrastructure Essar tower Business
Mumbai-based GTL Infrastructure (GIL), a subsidiary of telecom network major GTL, has acquired Essar Telecom Infrastructure (ETIPL), a closely-held subsidiary of the Essar Group and one of the largest telecom infrastructure service providers in the country for an estimated $1.5 billion (Rs 6,000 crore) according to sources.

GTL plans to use internal accruals to fund the acquisition. The company had raised $300 million (Rs 1,200 crore) through a foreign currency convertible bond (FCCB) issue and was sanctioned a debt of $700 million (Rs 2,800 crore) by domestic and international banks. It had raised $85 million through a rights issue and $250 million through issue of warrants to the promoter group.

The deal, expected to be announced next week, will help GIL increase its tower presence by 50 per cent and consolidate its position as an independent infrastructure provider. Earlier GTL had denied speculations of its talks with Essar for a possible acquisition.

Last year, Vodafone Essar, Bharti Infratel and Idea Cellular had formed an independent tower company, Indus Towers, with Bharti and Vodafone-Essar holding 42% each and Idea Cellular picking up the balance 16%.

GTL Infrastructure reported a net loss of Rs 16.01 crore in Q3 December 2007 as against net profit of Rs 7.16 crore in Q3 December 2006. Sales rose 120.5% to Rs 37.28 crore in Q3 December 2007 over Q3 December 2006.

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