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RCOM signs binding agreement with Brookfield for sale of tower assets

Finance , December 21, 2016

Reliance Communications (RCOM) has signed binding agreements with Brookfield Infrastructure and its institutional partners to sell 51 per cent stake in its tower business for Rs 110 billion. The transaction is subject to regulatory and other requisite approvals.

As per the terms of the deal, RCOM’s telecom towers will be demerged into a separate new company that will be wholly-owned and independently managed by Brookfield Infrastructure. This will be the second largest independent and operator-neutral tower company in India.

Further, RCOM will also receive Class B non-voting shares in the new tower company. RCOM will have access to certain information and other rights in the new company, but will not be involved directly or indirectly in the management and operations of the new Company. Meanwhile, RCOM and Reliance Jio Infocomm Limited will continue as major long term tenants of the new tower company, along with other existing third party telecom operators.

RCOM will utilise the upfront cash payment of Rs 110 billion to reduce its debt.

 
 

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