RCom tower sales talks extended by 10-15 days
15 January 2016
Reliance Communications, which had entered into a non-binding agreement to sell its telecom towers to two private equity firms, is to extend the talks by another 15-20 days.
The discussions are being extended as the parties are yet to reach a conclusive settlement, several reports today said.
''The firms have sought more time to complete the due diligence and to reach a conclusive settlement. The companies are activating a clause in the agreement that says the negotiations could be extended if both the parties agree to it,'' one source said, declining to identified before a formal announcement.
On 4 December 2105, in a bid to pare its debt, RCom had signed non-binding agreements with Tillman Global Holdings and TPG Asia to sell its tower assets. Separately, the two PE firms were also evaluating RCom's nationwide inter- and intra-city optical fibre assets.
The companies have entered into an exclusivity agreement, which is valid till 15 January 2016.
The transaction is subject to final due diligence, definitive documentation, applicable regulatory and other approvals and certain other terms and conditions, RCom said, adding, ''there can be no certainty that a transaction will result''.
?Together the transactions were expected to fetch about Rs 30,000 crore, all of which will be used to reduce RCom's debt, currently at nearly Rs40,000 crore.
Further, the financing cost of the debt is also expected to come down to about Rs 600 crore from the present Rs3,500 crore. The tower assets will be spun out of the company into a Special Purpose Vehicle. The SPV, under the agreement, was to be completely owned by Tillman and TPG.