SBI Macquarie-led group buys 11% in Quippo-WTTIL

Quippo raises Rs 1,400 cr, says fund will be used to repay loans.

A SBI Macquarie-led consortium today said it had picked up around 11 per cent stake in telecom infrastructure company Viom Networks, previously known as Quippo-WTTIL, for Rs 1,400 crore ($304 million). The identity of the other partner, an international one, was not revealed. However, sources said WL Ross & Co, the US-based turnaround group, could be the other partner.

SBI Macquarie made the investment from its $1-billion Macquarie SBI Infrastructure Fund (MSIF). MSIF bought the stake from Quippo Telecom. MSIF is a joint venture between Macquarie Capital and State Bank of India (SBI).

“This is the largest and first investment made by MSIF in the sector. Other investments are being evaluated and we expect this acquisition to be one of the number of investments that MSIF will complete in near future,” said Varun Bajpai, chief executive officer, SBI Macquarie Infrastructure Management.

“Viom Networks has sold almost 11 per cent stake to a consortium led by Macquarie SBI Infrastructure Fund for Rs 1,400 crore. The company will utilise the funds to repay its previous loans,” Sunil Kanoria, Vice-Chairman, SREI. “Quippo-WTTIL will be a debt-free company after this investment.”

Viom is an independent telecom infrastructure company, with over 37,000 towers, and hosts around 80,000 tenants on its towers, taking its tenancy ratio to 2.2x. It has an enterprise value of Rs 20,000 crore.

In 2009, Quippo Telecom Infrastructure (QTIL) tied up with Tata Teleservices (TTSL) and the merger of their passive infrastructure business resulted in the formation of Quippo-WTTIL.

TTSL and Tata Sons hold a 54 per cent stake in the company, while the other 46 per cent is owned by QTIL’s promoter group, the Kanorias of SREI Infrastructure Finance, IDFC, Oman Investment Fund, GIC-Singapore and MSIF.

During the merger in 2009, Quippo-led investors who had 46 per cent in the telecom company, had taken a debt of Rs 1,400 crore. This debt will be re-paid from the equity brought in by SBI Macquarie. Each of the Quippo-led private equity investors have diluted their stake to make SBI Macquarie the second largest stakeholder among Quippo-led investors in Viom Networks.

SREI Infrastructure is the largest stakeholder among the Quippo-led investors, with a 13 per cent stake, after the transaction. The other private equity investors include IDFC and GIC-Singapore, which together hold seven per cent, Oman Investment Fund (around eight per cent). The rest is held by four minority shareholders.

Viom plans to add another 20,000-25,000 telecom towers to its portfolio, at an investment of around Rs 8,000 crore, in the next two years. It aims to increase its tenancy ratio to 2.5x.