Reliance Comms signs binding deal to sell 51% tower stake
India’s Reliance Communications has signed a binding agreement to sell a 51% stake in its tower company for $1.6 billion, about a quarter of the group’s total debt.
Brookfield Infrastructure, a Canadian investment group, will buy the stake in Reliance Infratel. The deal means Reliance Communications (RCom) still has to find another $3 billion or so to meet owner Anil Ambani’s target to reduce total debt by three-quarters by September 2017: that is likely to be achieved by RCom’s planned merger of its Indian mobile business with Aircel.
The Brookfield sale was originally announced in October 2016, but the two groups have now formally agreed to the all-cash deal.
The new company will be managed by Brookfield independently, and RCom will have non-voting shares in it.
RCom will be anchor tenant but Brookfield will seek other mobile customers. Rival operator Reliance Jio, owned by Mukesh Ambani, brother of Anil, is already a tenant.
RCom also owns international carrier Global Cloud Xchange (GCX), which used to be Reliance Globalcom.