Reliance Communications to close tower deal in two weeks

Hikes capex guidance for FY17 to Rs 4,000 cr

Reliance Communications (RCom) is expecting to close its tower assets sale deal with private equity firms within the next two weeks. Speaking at an analysts’ conference call on Monday, Vinod Sawhny, chief executive officer of RCom, said, “We expect to close the deal in two weeks.”

Earlier this month, RCom had extended the deadline to complete its tower sale agreements with private equity firms TPG Capital and Tillman Global Holdings till the end of this month. Sources said the companies could not agree upon lease agreements as RCom will continue to use the towers after the sale and that is why the talks were extended.

The company on Monday also raised its capital expenditure (capex) guidance for the current financial year to Rs 4,000 crore, up from Rs 3,000 crore, according to earlier announcement. It said a similar amount would be spent in the next financial year also.

“RCom will continue to lead consolidations in the telecom sector and there would be capex and opex synergies. Also, we are raising our capex guidance to Rs 4,000 crore for this financial year and next year to strengthen our 3G network,” Gurdeep Singh, chief executive officer (consumer business), said during the conference call.

The telecom firm has already received approvals from stock exchanges to go ahead with its merger plan with Russian telecom player MTS and is awaiting other formalities to close the deal. Its talks with Aircel to merge the entities has a deadline of March 22 and it expects to complete the transaction before that.

The flagship company of Reliance Group, led by Anil Ambani, has signed pacts with Reliance Jio to sell its 800-MHz licence in nine circles. Both groups have agreed to use each others' towers and optical fibre networks to support each others' consumers by signing intra-circle roaming pacts. Both will offer fourth-generation services by sharing each others' resources, as part of the deal.

The debt-ridden firm is doing everything it can to pare its huge debt of nearly Rs 40,000 crore. Apart from tower sale, the company has started monetising its real estate assets. Earlier, it had announced to sell its flats in Navi Mumbai for Rs 330 crore. It also plans to sell nearly four acres land in central Delhi to reduce its debt burden, company officials said on Monday.