GTPL Hathway looks to raise Rs 300 cr from fresh issue of shares, debt to be trimmed

MUMBAI: GTPL Hathway, which has filed with market regulator SEBI for an initial public offering (IPO), is looking to raise Rs 300 crore (Rs 3 billion) through a fresh issue of shares to cut debt.

The other component of the proposed IPO is the offer for sale by the shareholders, the proceeds of which will not go to the company. The selling shareholders will be entitled to their respective proportion of proceeds from the offer for sale after deducting their proportionate offer related expenses.

Out of the net proceeds of the Rs 300-crore fresh issue, GTPL Hathway intends to utilise Rs 229.67 crore for repayment/pre-payment, in full or part, of certain borrowings. Of this, Rs 153.62 crore will be paid in FY17 and Rs 76.05 crore in FY18 .

Until 31 October 2016, the company had total outstanding secured (fund-based and non-fund-based) borrowings amounting to Rs 402.13 crore. It owes Rs 333.695 crore to IndoStar Capital Finance, SBER Bank, RBL Bank, IDBI Bank, Yes Bank, Axis Bank and Cisco Systems Capital.

As on 31 October 2016, GTPL Hathway owes Rs 118.61 crore to IndoStar Capital, Rs 53.6 crore to Yes Bank, Rs 45.58 crore to IDBI Bank, Rs 36.92 crore to Axis Bank, Rs 35 crore to RBL Bank, Rs 22.35 crore to SBER Bank and Rs 21.66 crore to Cisco Systems.

“The prepayment or scheduled repayment will help reduce our outstanding indebtedness and debt servicing costs, assist us in maintaining a favourable debt to equity ratio and enable utilisation of our internal accruals for further investment in business growth and expansion. In addition, we believe that the debt to equity ratio of our company will improve significantly enabling us to raise further resources in the future to fund potential business development opportunities,” GTPL Hathway said in its filing.

Besides debt payment, GTPL Hathway also intends to utilise a small component of the net proceeds towards general corporate purposes.

In case of a shortfall in raising requisite capital from the net proceeds, the company may have to explore a range of options towards repayment of debt including utilising its internal accruals or raising new debt.

Besides fresh issue of shares, GTPL Hathway is offering up to 18 million equity shares as offer for sale.

While Hathway Cable & Datacom is offering nine million shares for sale, Aniruddhasinh Jadeja and Gujarat DigiCom, in which Jadeja owns a majority stake, will sell 1.42 million and 6.85 million equity shares respectively. Kanaksinh Rana and Amit Shah, the other shareholders in the company, will offload up to 550,000 and up to 180,000 equity shares respectively.

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