RCOM to sell tower, optic fibre biz to PE firms for Rs 30k cr

Reliance Communications, part of Anil Ambani-led group, has signed a pact to sell its tower and optic fibre assets in India to private equity firms TPG and Tillman Global in a deal estimated at about Rs 30,000 crore.
RCOM intends to utilise the proceeds of the proposed transaction to reduce its debt, which is estimated at about Rs 40,000 crore.
The company said in a statement that "a non-binding term sheet" has been signed for the proposed acquisition of RCom's nationwide tower assets and related infrastructure by Tillman and TPG Asia.
While the company did not disclose the deal size, sources said the proposed transaction values RCOM's mobile towers at about Rs 22,000 crore and the valuation of the related infrastructure including optic fibre assets, is estimated at about Rs 7,000-8,000 crore. This would be one of the biggest transactions in the Indian telecom sector.

The company said the realisation of the deal proceeds would help bring down its interest cost by 75 per cent to Rs 600 crore a year.
RCOM said it will continue as an anchor tenant on the tower assets, under a long term agreement, for its integrated telecommunications business.

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Under the term sheet, the specified assets are intended to be transferred from Reliance Infratel Ltd (RITL) on a going concern basis into a separate SPV, to be owned 100 per cent by Tillman and TPG.
RCOM owns about 96 per cent stake in RITL, which has about 43,500 mobile towers across the country. The remaining 4 per cent stake is owned by institutional investors.

The statement further said the parties have entered into an exclusivity agreement valid till January 15, 2016.
RCOM said the proposed transaction is subject to final due diligence, definitive documentation, applicable regulatory and other approvals and certain other terms and conditions.
"Accordingly, there can be no certainty that a transaction will result. Further announcements will be made at an appropriate stage," it added.