Reliance Communications draws interest in sale of tower unit stake - sources

By Sumeet Chatterjee and Aman Shah

MUMBAI (Reuters) - Reliance Communications has revived a plan to sell a stake in its tower unit, attracting early interest from U.S. private equity firms as well as sector rivals, three sources with direct knowledge of the matter said.

Reliance Communications, India's fourth-biggest mobile phone carrier, is looking at a valuation of about $4 billion for the unit, which has about 45,000 mobile phone masts, the sources said.

The stake sale is key for Reliance Communications, the most-leveraged Indian telecoms carrier with $5.8 billion in net debt as of the end of March. Past efforts to sell a stake in the unit or to take it public failed to go through.

This time, private equity firms including Blackstone , Providence Equity Partners and The Carlyle Group have shown an interest in bidding, said the sources, requesting anonymity as the information was not public.

From the industry side, American Tower Corp and India's Bharti Infratel Ltd were other potential suitors for the 51 percent stake to be offered in Reliance Infratel, they said.

"We keep evaluating options on an ongoing basis and are open to opportunities provided there is a strategic fit," a Bharti group spokesman said in a statement, although he did not specifically confirm possible interest in the unit.

A Reliance Communications spokesman declined to comment. The company said in a regulatory filing in May that it was looking to monetise its tower assets by March 2016.

Blackstone, Carlyle and American Tower, which has a presence in the Indian market, declined comment. Providence Equity could not be immediately reached for comment.

India's mobile phone tower sector, which was hit by a court order in 2012 cancelling the permits of several carriers, is expected to see higher demand and tenancies as operators step up the rollout of networks to meet a surge in data uptake.

Domestic tower companies may be interested because of an increase in demand from new carriers such as Reliance Jio Infocomm that are preparing to roll out 4G services, said one of the sources.

Another of the sources said Reliance Communications was expected to transfer $1.5 billion of its debt to the tower company on a non-recourse basis after closure of the deal, which is likely in October.

The tower unit's parent also expects to get at least $1 billion in net proceeds for the stake, which would be used to pay off its high-cost rupee debt, the source added.

(Reporting by Sumeet Chatterjee and Aman Shah; Additional reporting by Karen Rebelo; Writing by Devidutta Tripathy; Editing by Simon Cameron-Moore and Edmund Klamann)