Bharti Infratel, Brookfield eye tower assets of debt-ridden RCom

Bharti Infratel and Canadian private equity fund Brookfield Asset Management have shown an interest in the tower assets of debt-ridden Reliance Communications (RCom), which are expected to be put on the block after the Insolvency and Bankruptcy Code (IBC) process begins. 

Bharti Infratel, the mobile tower arm of Bharti Airtel, is undergoing a reverse merger with Indus Towers and will soon be the largest player in the sector with 165,000 towers. RCom has over 43,000 towers and 170,000 km of fibre in the country.

“We keep evaluating options on an ongoing basis and are open to opportunities, provided there is a strategic fit. Beyond this, we have no specific comments to offer,” a spokesperson for Bharti Infratel said. According to sources in the know, Brookfield is also in discussions with Reliance Jio to lease out RCom’s towers, in case it wins the bid, on a long-term contract. Currently, Jio is the only tenant on these towers.  

 

Jio has already announced the monetisation of its tower and fibre business by spinning them off into separate entities. It has reportedly held talks with Brookfield to pick up a stake in the business. Sources say it might make more sense for Brookfield to bid for RCom’s towers in alliance with Jio. The Canadian fund had earlier offered to buy RCom’s tower business, pegging the company’s valuation at Rs 20,000 crore, but the deal did not fructify.    

An e-mail query sent to Brookfield went unanswered. Jio also did not reply to a query.

RCom announced on Monday the cancellation of its Rs 25,000-crore deal with Jio to sell its tower, spectrum and fibre assets, after failing to receive regulatory and bank clearances.

The telecom company has announced its intention to seek debt resolution through the National Company Law Tribunal (NCLT). On April 8, the NCLAT will hear its petition to send back the case to the NCLT.  

RCom’s decision to go to the NCLT has come as a setback for the Department of Telecommunications (DoT) as the company has dues of over Rs 18,000 crore to the government, a chunk of which is under dispute in courts. Earlier, the DoT had not given its clearance to the sale of RCom assets as it wanted either the buyer or the seller to provide a guarantee that all its outstanding dues would be paid. However, with Jio writing to the DoT that it would not be responsible for any dues from retrospective effect and RCom not willing to give such a guarantee, the company had no option but to go to the NCLT.