American Tower Corporation today said it has completed the acquisition of 51 per cent controlling stake in Viom Networks, one of the world's leading independent telecom mast operators with over 42,000 towers, for Rs 7,600 crore following all regulatory approvals.
With this acquisition, ATC will own 57,000 towers in the country, the company said in a statement. ATC globally has a portfolio of over 1,42,000 telecom masts.
On October 21 last year, ATC had agreed to pick 51 per cent stake in Viom for Rs 7,635 crore, valuing Viom at around Rs 22,000 crore, including debt, making this largest inbound M&A deal last fiscal, and ending the over two-year long discussions that included three rounds of bidding between interested parties. Viom has around Rs 5,100-crore debt.
The Cabinet Committee on Economic Affairs had earlier this month approved the deal, making it the largest foreign direct investments in the domestic telecom sector in recent history.
Commenting on the acquisition, ATC vice-president Amit Sharma said, "The Viom acquisition makes us the leading independent telecom infrastructure provider and will allow us better serve our customers as they expand their 3G/4G network reach and capacity.
"The deal will also enable us to play a key role in providing critical communications real estate and vital passive telecom infrastructure essential to the Indian government's digital India initiative," he said.
The acquisition gives ATC option to acquire all or a portion of the remaining 49 per cent stake in Viom.
Sunil Kanoria-led Srei Infra which was managing the daily operations of the company despite being a minority shareholder has received Rs 2,952 crore from the deal, the company said in a separate statement.
Kanoria, the vice-chairman and managing director of Viom and also Srei, said the sale will help him pare his debt and interest cost, and thereby improve profitability.
ATC, that has over the years largely accumulated telecom towers in the country through mergers, will fold its various arms here into Viom to create one composite entity with over 54,000 towers.
The Kolkata-based Srei group held management control with a minority stake of 18.5 per cent, the entire chunk was sold to ATC. GIC Investments of Singapore and Oman Investment Authority, both holding small single-digit stakes, too exited the company.
Tata Teleservices that held majority of 54 per cent has
brought down its stake to 32 per cent, while IDFC's private equity division has brought down its holding to 3.2 per cent. Private equity fund SBI-Macquarie retains its 11 per cent stake entirely.
Srei said the transaction resulted in a total FDI inflows of Rs 5,856 crore into the telecom infrastructure sector, out of which Srei has received a total amount of Rs 2,931 crore.
Started off as Quippo Telecom Infrastructure in 2005 with 50 towers, Viom pioneered the concept of tower sharing in the country at a time when telecom operators were building and operating their own captive towers.
Between 2006 and 2008, Quippo grew to around 5,000 towers through organic growth and acquisition of Spice telecom towers. In 2009, by merging its tower business with Tata Teleservices, the company was renamed Viom with around 18,000 towers.
Viom grew organically over the next few years to cross 40,000 towers by 2011-12 and emerged as the largest independent telecom tower company in the country.
Today it commands the highest tenancy ratio of 2.62x with an estimated Editda of over Rs 2000 crore as of March end.
Commenting on the sale Sunil Kanoria, vice-chairman of Srei and Viom, said the transaction will lead to substantial cash inflow into Srei, which will lower its debt and reduce interest cost, thereby augmenting capital and improving future profitability.