Reliance Communications on Friday agreed to sell its tower assets to investment firms Tillman Capital and TPG Asia.
Under the terms of the non-binding deal, the Indian operator’s 96% stake in Reliance Infratel – which owns 45,000 cell towers – will be spun off into a special purpose vehicle (SPV), of which Tillman and TPG will acquire 100%. RCom will continue to use the towers under a long-term master service agreement.
In addition, RCom said Tillman and TPG are also evaluating a potential separate bid for the telco’s inter-city and intra-city fibre assets.
The Infratel sale has been on the cards for months, with Reliance Communications having shortlisted a number of suitors in August. During the company’s AGM in late September, RCom chairman Anil Ambani said it was making excellent progress towards monetising its Reliance Infratel stake, and that he expected to sign and announce a the deal in the coming six weeks.
In a statement on Friday, RCom said it has entered into an exclusivity agreement with Tillman and TPG that is valid until 15 January 2016, to allow time to hammer out the details of the transaction. The deal is also subject to due diligence and regulatory approvals.
Financial details were not disclosed, but according to numerous reports in recent months, RCom’s Infratel stake is worth INR200 billion-INR240 billion (€2.7 billion-€3.2 billion).
"RCom intends to utilise the proceeds of the proposed transaction only to reduce its debt," the telco said.
Reliance Communications’ debt stood at INR386 billion (€5.2 billion) at the end of June.
