Reliance Jio sells tower unit to Brookfield for $337m
Reliance Industrial Investments, a subsidiary of Reliance Industries, has entered into an agreement with Brookfield Infrastructure Partners of Reliance Jio lnfratel for $337 million (Rs 25,215 crore).
“This is a unique opportunity to invest in a large-scale, high-quality telecom business and participate in India’s high-growth data industry,” said Sam Pollock (pictured), chief executive officer of Brookfield Infrastructure. “This is an attractive business that offers downside protection with meaningful upside by co-locating equipment from other mobile network operators on the towers, which to-date, have only carried Jio equipment. Further growth is anticipated through a tower build-out program, which is expected to bring the portfolio to approximately 175,000 towers.”
Once completed, Brookfield will hold a 100% stake in Reliance Jio lnfratel and the $337 million accounts only for Brookfield's share of investment, the balance, based on the total equity requirement is $3.7 billion, is to be paid by its institutional partners.
The deal was predicted earlier this year, with industry analysts noticing a shift in the India Tower landscape. At the time Arianna Neri, managing director of Asia & Americas at TowerXchange, commented:
“We are pleased to enter into this long and strategic relationship with Brookfield, which is one of the largest and most respected managers of infrastructure assets globally,” said Shri Mukesh D Ambani, chairman and managing director of RIL. “We are confident of Brookfield’s abilities to manage this large portfolio of high-quality infrastructure assets and further enhancing value creation opportunities. This transaction demonstrates the belief of global investors in the potential of India’s digital opportunity.”
Through this transaction, Brookfield Infrastructure is acquiring approximately 130,000 towers that form part of Reliance Jio’s telecoms network. As such, it is an anchor tenant of the tower portfolio under a 30-year Master Services Agreement, providing a secure source of revenues for the tower company.
“We are pleased to be continuing our relationship with Reliance, following our successful Indian gas pipeline investment completed earlier this year,” said Anuj Ranjan, Managing Partner and Head of India and the Middle East for Brookfield. “Leveraging the strength of our partnership with Reliance, combined with the depth of Brookfield Infrastructure’s operating expertise, makes us well-positioned to execute on future growth for the business.”
The deal is subject to customary regulatory approvals.