Indian service provider, Reliance Communications has agreed to sell 51% of its tower business to asset manager Brookfield for INR110Bn ($1.6Bn). Under the non-binding deal, the stake in Reliance Infratel will be transferred into a separate special purpose vehicle (SPV). The remaining 49% will be owned by RCom, which will continue to be a tenant on the towers. RCom is under huge debt and the sale will help it to bring down this 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, which are expected to contribute to significant growth in revenues and profitability for the towers business in the future,” Rcom said, in a statement.
RCom has been trying to offload stake in Reliance Infratel for quiet some time now. Earlier the company entered exclusive talks with Tillman Capital and TPG Asia. However the talks were not successful. This time around the company would be hoping that it is successful in taking the deal to fruition.