In a bid to pare debt, Reliance Communications (RCom) has inked an agreement to sell its tower assets to private equity firms TPG and Tillman Global. Separately, the two PE firms are also evaluating RCom’s nationwide inter- and intra-city optic fibre assets.
Together the transactions are expected to fetch about ₹30,000 crore, all of which will be used to reduce RCom’s debt, currently at nearly ₹40,000 crore. Further, the financing cost of the debt is also expected to come down to about ₹600 crore from the present ₹3,500 crore. The tower assets will be spun out of the company into a Special Purpose Vehicle (SPV). The SPV will be completely owned by Tillman and TPG.
RCom, which is the country’s fourth largest mobile operator by subscribers, will continue to be an anchor tenant for the telecom towers. Mukesh Ambani backed Reliance Jio has also taken tenancy on these towers.
The Anil Ambani group company will sell a total of 44,000 towers and about 1 lakh route kilometres of optic fibre infrastructure for ₹22,000 crore and ₹8,000 crore, respectively.
The companies have entered into an exclusivity agreement, which is valid till January 15, 2016. “This transaction is subject to final due diligence, definitive documentation, applicable regulatory and other approvals and certain other terms and conditions. Accordingly, there can be no certainty that a transaction will result,” RCom said in a statement.
On Friday, RCom shares closed down 3.11 per cent at ₹81.05 on the BSE, while the benchmark 30-index Sensex fell 3.11 per cent.