GTL Infra, Essar in race for Aircel tower assets

With 11,500 of these, the winner must be prepared to pay $2.5 bn

Three major telecom companies have joined the race to acquire GSM service provider Aircel Cellular’s passive telecom infrastructure, valued at around $2.5 billion.

Essar Infratel has expressed its interest in acquiring Aircel’s tower portfolio, while Wireless Tata Telecom Infrastructure Ltd (WTTIL) and GTL Infrastructure are in advanced stages of the due diligence procedures, an informed source told Business Standard .

WWTIL and GTL Infrastructure have also quoted an initial bid price to Aircel Cellular, which would be reviewed after the due diligence procedures, he said. He, however, did not divulge the prices quoted by the two companies, rather than saying it was in line with the industry valuations.

WTTIL is a Tata Teleservices Ltd (TTSL) subsidiary in which Quippo Telecom Infrastructure, the telecom tower subsidiary of SREI Infrastructure Finance, has merged its over 5,000 towers. Under the merger terms, the promoters of Quippo would hold a 49 per cent in the merged entity. GTL Infrastructure is an independent telecom tower company.

When asked, Quippo Group Vice-Chairman and Managing Director Sunil Kanoria confirmed the development. “We had submitted a non-bidding bid for Aircel’s tower business, and now have begun due diligence procedures. We expect to complete the procedures in the next couple of weeks,” he said.

He, however, declined to comment on the valuation of Aircel Cellular tower operations. When asked, spokespersons of GTL Infrastructure and Essar Infratel declined to comment.

The three companies are joining others, including NYSE-listed American Towers, Bharti Infratel and Crown Castle, who had earlier shown interest in Aircel’s telecom tower operations.

Aircel Cellular, in which Malaysia's Maxis holds a 74 per cent stake, was looking at either hiving or selling off its towers, so as to become asset-light and concentrate on its telecom services. The company has over 11,500 towers in the southern and north-eastern circles, which would have a valuation of around $2.3-2.5 billion.

Standard Chartered, Nomura and Rothschild are advising Aircel on the matter.