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Reliance Communications on Tuesday said its subsidiary Reliance Infratel has received shareholders' approval for the demerger of its tower division into Towercom Infrastructure (TIPL).
"Reliance Infratel (RITL) has approved with 98 per cent majority the scheme of arrangement for demerger of the tower division of the RITL into Towercom Infrastructure," RCOM said in a statement.
Reliance Communications in December last year had announced an agreement to sell its tower business to Canada- based Brookfield Infrastructure and its institutional partners for Rs 11,000 crore.
The deal is touted as the largest-ever investment by an overseas financial investor in the infrastructure sector in India.
Upon the completion of the demerger and other conditions, Rapid Holdings 2 Pte, a company which is a part of the Brookfield Infrastructure Group will acquire 100 per cent of TIPL and thereby create the second largest independent and operator-neutral tower company in India.
Reliance Infratel has already received approval from the Competition Commission of India.
"The company's telecom towers demerged into TIPL will be 100 per cent owned and independently managed by Brookfield Infrastructure," the statement said.
The upfront cash payment that RCOM will receive will be solely used to reduce its debt. The already announced combination of RCOM's wireless business with Aircel, and the monetisation of the tower business, will together reduce RCOM's overall debt by Rs 31,000 crore ($4.8 billion), or nearly 70 per cent of existing debt.
RCOM and Reliance Jio will continue as major long term tenants of the TIPL along with other existing third party telecom operators.
A petition is filed with the NCLT, Mumbai Bench, for approval of the scheme, the statement added.