American Tower to buy 51% stake in Viom Networks for Rs 7,600 crore

In the largest foreign direct investment (FDI) in the telecom sector this fiscal, US-based American Tower Corporation (ATC) has agreed to buy a majority stake in telecom tower firm Viom Networks for Rs 7,635 crore in an all-cash deal.

ATC will buy 51% stake in Viom, which owns and operates about 42,200 towers and has another 1,000 mobile phone masts under construction, from Tata Teleservices Ltd and SREI Infrastructure Finance.

"Under the agreement, American Tower may acquire or be required to acquire all or a portion of the remaining 49% ownership stake in Viom," it said in a statement.

Also, as a pre-condition for the deal, ATC's existing 14,000 telecom mobile masts will be merged with Viom.

This will result "in certain ownership adjustments," the statement said without elaborating.

Tata Teleservices Ltd owns 54% of Viom, with Kolkata-based SREI Group of the Kanoria family holding about 18% with management control. Singapore state investor GIC, Macquarie SBI Infrastructure Fund, Oman Investment Fund and India's IDFC Private Equity are other investors in the company.

ATC will buy all of SREI's 18.50% stake and will also acquire stake from other shareholders.

"Tata Teleservices stake will come down to about 34% from current 54% now and further it would get reduced to 26% after ATC merges its Indian business with Viom," said Sunil Kanoria Vice-Chairman of Srei Infrastructure Finance.

IDFC's private equity division will bring down its holding to 3.2%, while private equity fund SBI-Macquarie will retain its 11% stake.

Viom was formed in 2009 as result of merger of mobile towers of Tata Teleservices and Quippo Telecom -- a unit under Srei Group.