Facebook Pixel Code

Tulip Telecom kicks off debt recast talks

Enterprise data services firm Tulip Telecom is set to undergo a corporate debt restructuring programme.

Enterprise data services firm Tulip Telecom is set to undergo a corporate debt restructuring (CDR) programme.

As part of the process, the company has initiated discussions with its senior lenders to restructure its debt with longer maturity periods under the CDR mechanism including a moratorium on principal and interest payments.

?The debt restructuring exercise will ensure better liquidity and enable the company to focus and strengthen its core operations,? the company said in a statement, which made the company?s stock decline 3.68% on the BSE to close at R32.7 on Monday.

At the end of September 2012, Tulip Telecom had a total debt of R2,400 crore. More than 90% of shares held by promoters- who own about 68% in the company-is pledged with lenders.

?The company, in consultation with its senior secured lenders, has taken the decision to restructure the debt so as to enable the company to repay its debt over a longer period, thus easing the debt and interest burden,? added HS Bedi, chairman and managing director, Tulip Telecom.

In August, credit rating agency Fitch had downgraded Tulip Telecom from junk to default status following its failure to redeem its $97 million outstanding foreign currency convertible bonds (FCCBs) by August 26. In fact, the company is still in discussions with the FCCB holders on FCCB redemption. The company said that the engagement with bondholders are constructive and progressive, and it expects to reach an acceptable solution for all stakeholders at the earliest possible date.

Adding that the near term outlook is mixed, considering liquidity constraints and a volatile market environment, despite strong business fundamentals, Bedi said: ?We are confident of leveraging our extremely valuable and state-of-the-art infrastructure and an enviable clientele, over the longer term to post a healthy performance on a sustainable basis.?

Get live Share Market updates, Stock Market Quotes, and the latest India News and business news on Financial Express. Download the Financial Express App for the latest finance news.

First published on: 01-01-2013 at 23:26 IST
Market Data
Market Data
Today’s Most Popular Stories ×