INTRODUCTION

GTL Infrastructure Limited (GTL Infra), a Global Group enterprise, is in the business of Shared Passive Telecom Infrastructure in India. The company has a portfolio of over 30,000 towers located across India that will help bringing in connectivity at affordable prices to the poorest of poor, creating a positive impact on Indian economy. Aircel is the 5th largest GSM mobile service provider and the fastest growing telecom Operator in India with over 35 Mn subscribers. Aircel is promoted by Maxis Communications Berhad, which has a telecom presence in Malaysia, Indonesia and India and the Apollo Hospitals Group, a premire healthcare provider in India.

ACQUISITION
There was a demand for more towers and since Aircel is a major company GTL acquired the tower business of Aircel in july 2010. The details of the balance sheet and purchase price are as under :-

Balance Sheet of GTL ------------------- in Rs. Cr. ------------------Jun '11 15 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 97.27 97.27 0.00 0.00 1,187.80 0.00 1,285.07 0.00 3,963.83 3,963.83 5,248.90 Jun '11 Mar '10 12 mths 96.72 96.72 0.00 0.00 1,045.52 0.00 1,142.24 0.00 2,373.50 2,373.50 3,515.74 Mar '10 Mar '09 12 mths 94.72 94.72 0.00 0.00 891.29 0.00 986.01 0.00 1,011.25 1,011.25 1,997.26 Mar '09 Mar '08 12 mths 94.57 94.57 0.00 0.00 829.05 0.00 923.62 0.00 701.82 701.82 1,625.44 Mar '08 Mar '07 9 mths 97.32 97.32 0.00 0.00 938.19 0.00 1,035.51 31.35 789.84 821.19 1,856.70 Mar '07

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15 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 842.01 318.45 523.56 300.42 2,802.55 333.07 668.85 548.78 1,550.70 1,687.56 0.00 3,238.26 0.00 1,588.04 27.86 1,615.90 1,622.36 0.00 5,248.89 572.72 132.12

12 mths 519.77 231.89 287.88 99.43 820.14 194.35 213.42 766.36 1,174.13 1,387.91 561.99 3,124.03 0.00 753.38 62.35 815.73 2,308.30 0.00 3,515.75 822.38 118.09

12 mths 408.69 184.69 224.00 146.45 728.36 246.27 300.32 262.78 809.37 533.10 628.66 1,971.13 0.00 1,018.38 54.30 1,072.68 898.45 0.00 1,997.26 799.53 104.09

12 mths 373.46 151.22 222.24 19.62 737.93 193.24 285.49 522.41 1,001.14 512.95 91.56 1,605.65 0.00 891.42 68.57 959.99 645.66 0.00 1,625.45 1,510.43 97.66

9 mths 342.36 125.80 216.56 61.66 363.39 120.00 265.47 966.20 1,351.67 365.46 117.54 1,834.67 0.00 584.33 35.25 619.58 1,215.09 0.00 1,856.70 1,117.26 106.41

Profit & Loss account

------------------- in Rs. Cr. -------------------

of GTL
Jun '11 15 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials 3,091.71 0.00 3,091.71 9.12 138.72 3,239.55 2,367.15 Mar '10 12 mths 1,551.33 0.00 1,551.33 126.16 -51.92 1,625.57 980.88 Mar '09 12 mths 1,450.90 0.00 1,450.90 35.61 53.04 1,539.55 1,067.97 Mar '08 12 mths 1,433.33 0.00 1,433.33 65.07 73.39 1,571.79 1,081.22 Mar '07 9 mths 691.59 0.00 691.59 27.89 62.93 782.41 520.97
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Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

0.00 70.58 158.18 0.00 137.68 0.00 2,733.59 Jun '11 15 mths 496.84 505.96 202.78 303.18 87.56 0.00 215.62 -0.33 215.29 72.05 143.57 366.43 0.00 9.73 1.62 972.68 14.76 10.00 132.12

0.00 90.72 0.03 66.13 96.06 0.00 1,233.82 Mar '10 12 mths 265.59 391.75 147.09 244.66 48.01 0.00 196.65 1.03 197.68 39.33 158.36 252.94 0.00 29.93 5.09 967.24 16.37 30.00 118.09

0.00 114.84 0.05 57.23 21.91 0.00 1,262.00 Mar '09 12 mths 241.94 277.55 113.03 164.52 43.41 0.00 121.11 -8.34 112.77 21.35 109.77 194.02 0.00 28.42 4.83 947.23 11.59 30.00 104.09

0.00 81.59 0.10 95.33 19.17 0.00 1,277.41 Mar '08 12 mths 229.31 294.38 114.68 179.70 45.88 0.00 133.82 -5.50 128.32 5.31 106.61 196.19 0.00 28.37 4.82 945.74 11.27 30.00 97.66

0.00 70.63 0.86 59.30 14.21 0.00 665.97 Mar '07 9 mths 88.55 116.44 39.79 76.65 29.96 0.00 46.69 17.05 63.74 3.67 43.03 145.00 0.00 25.82 4.39 973.17 4.42 25.00 106.41

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TERMS OF ACQUISITION
Aircels tower business is through an asset purchase of 17,500 existing towers, that comprise 21,000 tenancies. The purchase price of the deal is 8,400 cr. The equity funding for this deal stands at Rs 3,400Cr, out of which GTL Infra will be contributing upto Rs 1,750Cr and the remaining 5,000 cr is through debentures. The Company has purchased the Tower business of Aircel through Chennai Network Infrastructure Limited, a Special Purpose Vehilce (SPV) formed for the said purpose. The highlights of the transaction are as follows; - Purchase of 17,500 telecom towers; - 21,000 active tenants on these towers; - Transaction Value Rs.8,400 Crores; - Aircel has committed additional 20,000 tenancies over the next 3 years;

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As given above the transaction had proposed to be funded through a mix of Debt and Equity as follows: 1) Equity investment of Rs.3,400 Crores from the Company and its promoters. 2) While the Company subscribed through Trust for 51 % of the Equity, GTL Limited and Global Holding Corporation Private Limited, the Promoter Group companies subscribed for the balance of 49%. 3) Debt funding of Rs.5, 000 Crores has been syndicated and lead managed by SBI Capital Markets Limited.

POST ACQUISITION EFFECTS

The purchase of Aircel tower business will deliver strong revenue growth for the Company as the deal assures immediate revenue of Rs. 700 crore p.a. for next 15 years. The Company has also received additional commitment of 20,000 tenancies over a period of next 3 years which will provide additional revenue of Rs. 700 crore p.a. This will be in addition to the existing revenue base of the Company. As per the capital structure after the deal the total capital structure i.e. the debt and equity is 1.21 (exhibit 1) which is much lower compared to other tower business. Whereas the post deal industry scenario is quite different and higher as compared to other players. GTL with the commitment of additional 20,000 towers made by Aircel will go up to 50,500(exhibit 2). This also means that this valuation has made GTL Infra the largest independent tower company in the world.

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ANALYSIS
EQUITY As per the balance sheet in the the equity share capital pre-acquisition i.e. 2008 2009 was 94.72 crores and in the year of deal i.e 2009- 2010 it increased to 96.72 crores and in the current quarter i.e june 2011 it increased to 97.27 crores. DEBENTURES The debt capital prior acquisition i.e. 2008 2009 was 1,011.25 crores and in the year of deal i.e 2009- 2010 it increased to 2373.50 crores and in the current quarter i.e june 2011 it increased to 3,963.83 crores. INVESTMENT Likewise the investments prior acquisition i.e. 2008 2009 was 728.36 crores and in the year of deal i.e 2009- 2010 it increased to 820.14 crores and in the current quarter i.e june 2011 it increased to 2,802.55 crores. LIABILITES But liabilities have increased in the current quarter to 5,248.90 crores compared to 3,515.74 crores in the year of purchase and 1997.26 crores prior to acquisition.
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ASSETS The assets of GTL have increased in the current quarter to 1,550.70 compared to the earlier 1,174.13 and 809.37 on the date of acquisition and prior to acquisition.

EARNINGS PER SHARE

The EPS of GTL Infra has declined in the current quarter i.e 14.76 as compared to 16.37 and 11.59 in the year of acquisition and pre-acquisition respectively.

CONCLUSION
From the above analysis it can be concluded that by the acquisition of the Aircel tower business GTL has become the largest tower company in the world. Any deal has its own merits and demerits like Merits are 1) Increment in revenue growth. 2) Scale advantages in employee, marketing and admininstration areas. Demerits are The deal will increase the leverage. GTLI has a net debt of around Rs 2,300 crore.

EXHIBITS (2) 1) Post deal industry scenario

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2) Comparable capital structure.