GTL Infrastructure Ltd (GTL Infra) a Global Group Enterprise; was incorporated on February 4, 2004. It is a pioneer in Shared Telecom Infrastructure in India. The company is engaged in the business of providing Shared User Infrastructure facilities on Build, Own and Operate basis. They also offer ready to use passive infrastructure to wireless telecom operators. With a portfolio of about 28,000 towers located across all the 22 Telecom Circles in India, GTL Infra has emerged as India’s largest independent and neutral Telecom Tower company. The company is listed on BSE and NSE and has a Market Cap of Rs 2,305 Crores.

Business Model

The business model of infrastructure sharing enables the Telecom Operators to convert their capital expenditure to a fixed and predictable operational expenditure, allowing them to divert precious capital towards core activities.

Revenue

The revenues arise under long term (5-10-15 years) contracts with the Wireless Telecom Operators. Contracts are renewable upon expiry of the term, at the option of the Telecom Operators.

Chennai Network Infrastructure Limited (CNIL) was incorporated on 8th December, 2009 as a Special Purpose Vehicle formed through a trust, called Tower Trust. It owns, operates, manages, and maintains telecommunication infrastructure and towers and currently based in Chennai.

(The purpose of forming CNIL: In June 2010, the Hon’ble High Court sanctioned the transfer and vesting of Passive Infrastructure Undertaking from Aircel Ltd and their subsidiaries to Chennai Network Infrastructure Ltd, which involve the transfer of 17,500 telecom towers and other related components, 21,000 active tenants on these towers, a Right of First Refusal for additional 20,000 tenancies over the next three years for an all cash deal valued at an enterprise value of Rs 8,400 crore) (Source: Business Standard)

Transaction

GTL-Infra-SDR-Chennai-Network-Infra-merger-1

Valuation

The business of both the companies is same. Post implementation of Strategic Debt Restructuring (SDR), 19.31% of the total paid up capital of CNIL will be held by Tower Trust (Trust). GTL Infra is the sole beneficiary of the Trust. On the scheme becoming effective, 181,57,22,400 equity shares of Face Value Rs 10/- held by Trust into CNIL will be cancelled. The Free Cash Flow to Firm (FCFF) under DCF method for valuation of GTL Infra and CNIL is considered for valuation. The free cash flow available to the enterprise in the explicit period and those in perpetuity are discounted by discounting factor based on weighted average cost of capital.

Appointed date is 1st April 2016.

Swap ratio: 1 (One) equity share of GTL Infra of INR 10 each fully paid up for every 1 (One) equity share of CNIL of INR 10 each fully paid up.

Shareholding Pattern

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