RCom sells tower business to Brookfield Infrastructure for $1.6b

22 Dec 2016

Reliance Communications announced Wednesday it has signed binding agreements with Canada-based Brookfield Infrastructure and institutional partners to sell 51% stake in its tower unit, Reliance Infratel.

The company, which is controlled by billionaire Anil Ambani, will receive an upfront cash payment of Rs 11,000 crore ($1.6 billion). RCom will also receive class B non-voting shares in the new tower company, providing 49% future economic upside from the business, based on certain conditions, according to the company's press statement.

RCom’s telecom towers will be demerged into a separate new company to be wholly owned and independently managed by Brookfield Infrastructure. The new firm will become the second largest independent and operator-neutral towers company in India.

RCom will enjoy certain information and other rights, but will not be involved directly or indirectly in the management and operations of the new company.

RCom and Reliance Jio will continue as major long-term tenants of the tower company, along with other existing third party telecoms operators, the Indian telco said.

The deal, which is subject to approvals from shareholders, lenders and other regulatory compliances, is expected to be the largest ever investment by any overseas financial investor in the infrastructure sector in India.

RCom will use the cash to reduce its debt. RCom's previously announced wireless business merger with Aircel and the latest deal with Brookfield infrastructure will together reduce the company's overall debt by Rs. 31,000 crore ($4.6 billion), or nearly 70%, the company further said.

RCom will continue to hold a 50% stake in the wireless business combination with Aircel and the 49% upside in the towers business to be monetized at an appropriate time to further reduce its debt significantly, it added.

Related content

Follow Telecom Asia Sport!
No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.