RCom to sell 51% in tower business to Brookfield for Rs11,000 crore

In an attempt to pare debt, Reliance Communications Ltd (RCOM) has signed a definite agreement to sell a 51-per cent stake in its tower subsidiary to Brookfield Infrastructure Group for an upfront cash payment of Rs11,000 crore.

Brookfield, a global alternative asset manager with more than $250 billion of assets under management, will acquire a 51-per cent stake in the company while the remaining will be held by RCom.

Under the term sheet, the specified assets are intended to be transferred from its tower subsidiary Reliance Infratel Ltd into a separate special purpose vehicle that will be owned by Brookfield. RCom will continue as an anchor tenant on the tower assets under a long term agreement.

RCom will retain the remaining 49-per cent stake, while the Anil Ambani group company will utilise the entire Rs11,000 crore to reduce debt.

RCom and Brookfield expect considerable growth in tenancies based on increasing 4G offerings by all telecom operators, and the fast accelerating trends in data consumption. The companies expect these to contribute to significant growth in revenues and profitability for the towers business in the future.

RCom and Brookfield also see several opportunities for consolidation in the towers industry in India that will further enhance growth and value creation in the future.

The proposed transaction is subject to definitive documentation, customary approvals and certain other terms and conditions. Accordingly, there can be no certainty that a transaction will result, RCom said in a statement.