Tulip Telecom gets formal nod for CDR proposal
NEW DELHI: Enterprise data services provider Tulip TelecomBSE -4.88 % on Thursday got a formal approval to restructure its debt from the Empowered Group of the Corporate Debt Restructuring Cell, it said in a statement.
The company's domestic lenders, a consortium of 13 banks and financial institutions, approved the company's corporate debt restructuring package that includes a 30-month moratorium on principal and 18-month moratorium on interest.
Tulip was servicing a debt of more than Rs 2,700 crore as of September last year and was facing trouble paying up salaries to employees. The company's share price almost completely eroded in a year as the scrip fell from Rs 105.3 in January 2012 to less than Rs 35 in the beginning of this year. On Thursday, the company's scrip closed at Rs 18.5 on BSE, down over 4%.
Tulip Telecom chairman and managing director Lt Col (Retd) HS Bedi said that promoters had already infused the required promoter's contribution of Rs 60 crore which will be converted into equity. However, the foreign currency convertible bonds' redemption still remains an issue.
The company has failed to redeem outstanding FCCB worth $145 million that have a face value of $97 million and missed two maturity deadlines for redeeming the bonds that were issued in June 2007. The company said it was engaging with bondholders and expected to reach an acceptable solution for all stakeholders at the earliest possible date.
"Tulip has built a strong infrastructure for its enterprise data business and this approval shows the long-term commercial viability of our business. I am confident that this CDR package will enable the company to quickly return to a position of strength. We have been able to retain all our marquee customers over the past year and intend to quickly turn our business around with the strong support of our customers, employees, vendors and partners," Bedi said.
The company's domestic lenders, a consortium of 13 banks and financial institutions, approved the company's corporate debt restructuring package that includes a 30-month moratorium on principal and 18-month moratorium on interest.
Tulip Telecom chairman and managing director Lt Col (Retd) HS Bedi said that promoters had already infused the required promoter's contribution of Rs 60 crore which will be converted into equity. However, the foreign currency convertible bonds' redemption still remains an issue.
The company has failed to redeem outstanding FCCB worth $145 million that have a face value of $97 million and missed two maturity deadlines for redeeming the bonds that were issued in June 2007. The company said it was engaging with bondholders and expected to reach an acceptable solution for all stakeholders at the earliest possible date.
"Tulip has built a strong infrastructure for its enterprise data business and this approval shows the long-term commercial viability of our business. I am confident that this CDR package will enable the company to quickly return to a position of strength. We have been able to retain all our marquee customers over the past year and intend to quickly turn our business around with the strong support of our customers, employees, vendors and partners," Bedi said.
Courtesy: The Economic Times
