RCom eyes GTL Infra for tower biz stake sale


Prime VIP
New Delhi, June 21

Speculation is rife over the Anil Dhirubhai Ambani Group (ADAG) plans to sell a stake in Reliance Communications' (RCom) telecoms tower unit with conflicting reports emerging.

While earlier reports said RCom was said to be in advanced talks with Reliance Industries (RIL) to sell its optic cables and telecom tower businesses in a bid to back elder brother Mukesh’s foray back into the telecom sector, today’s reports said it may sell the tower business to GTL Infrastructure and a private equity investor.

The latest reports about the sale of tower business to GTL and a private equity investor said the sale in Reliance Infratel would be through a combination of cash and stock and would take a few weeks.

As part of the deal, 54,000 telecoms towers operated by Reliance Infratel and 32,000 GTL Infrastructure towers would be spun off into a special purpose vehicle (SPV), which would sell a stake to a private equity investor, it said.

The SPV will issue shares to Reliance Communications and GTL Infrastructure shareholders, and subsequently seek a stock market listing.

Reliance Communications was being advised by JPMorgan and GTL Infrastructure by Standard Chartered, it said.

RCom had said last week it planned to open up its telecoms tower unit to investors. It is looking to use the proceeds from the sale of tower business to clear debts.

Reports then emerged that it was in advanced talks with RIL and with Mukesh’s foray into the telecom sector with the buyout of Infotel, Anil’s first choice would be his elder brother’s company to sell the tower business. This, especially after the recent patch-up between the earlier warring brothers.

RIL has already announced plans to usher in the next level of growth through broadband and will be in immediate need for 15,000 towers for its broadband venture.

RCom has more than 50,000 telecom towers in its portfolio and around 1,90,000 km of fibre optic cable distributed across 44 cities in the country. Twice earlier, Reliance Infratel had tried to launch an IPO to raise funds, but adverse market conditions had forced it to call off the plan.

RIL has been eyeing the lucrative data market more than that of voice. With data market growing at around 70 per cent per year, easy access and leasing out options to corner fibre optic capability will be crucial for Mukesh’s RIL.