Tulip Telecom, on Monday, said it had initiated discussions with lenders to restructure its Rs.2,700-crore debt with longer maturity periods.
“We are in discussions with senior lenders to restructure our debt with longer maturity periods under the corporate debt restructuring mechanism, including a two-year moratorium on principal and interest payments,” Tulip Telecom Chairman and Managing Director H. S. Bedi told PTI.
This would ensure better liquidity and enable Tulip to focus and strengthen its core operations, he added.
“Instead of longer loans of up to 15 years like most telecom companies, we went for shorter duration loans (3-5 years).
“In consultation with senior secured lenders, we are now looking at restructuring the debt to repay it over a longer period of ten years,” he said. The company has 15 lenders including Bank of India, ICICI Bank and LIC.
The total debt of Rs.2,700 crore includes Rs.780 crore in foreign currency convertible bonds (FCCBs), Rs.600-crore worth of term loans, NCDs (Rs.545 crore) and ECBs worth Rs.340 crore.
On repayment of FCCBs, Mr. Bedi said, “Tulip’s ongoing engagement with bondholders continues to be both constructive and progressive and we expect to reach a solution soon.”
The entire process was an important step towards strengthening business by enhancing liquidity and inducing additional working capital, he added.
“The near term outlook is mixed, considering liquidity constraints and a volatile market environment, despite strong business fundamentals,” Mr. Bedi said.