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Linking Up: ITIL to merge with Ascend

March 24, 2011
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The telecom tower industry has been witnessing consolidation over the past two years. Quippo Telecom Infrastructure Limited acquired an equity stake in Wireless TT Info Services Limited (renamed Viom Networks Limited) and merged the tower portfolios of the two companies, while GTL and ATC grew their tower portfolios through acquisition.

In sync with this trend, two tower infrastructure companies – India Telecom Infra Limited (ITIL) and Ascend Telecom Infrastructure (the erstwhile Aster) – have also decided to merge their operations. The companies will soon be filing a scheme of amalgamation with the Andhra Pradesh and Tamil Nadu high courts to merge ITIL into Ascend after receiving the approval of all their stakeholders.

ITIL, which is jointly promoted by TVS Interconnect Systems and Infrastructure Leasing and Financial Services, has a portfolio of about 3,000 towers while Ascend, owned by private equity firm New Silk Route, will bring in 1,000 towers to the merged entity. Between them, Ascend and ITIL cater to several mobile operators including Idea Cellular, Bharat Sanchar Nigam Limited, Vodafone Essar, Tata Teleservices Limited and Aircel.

The merger will be a cashless transaction and post-merger, the promoters will invest around Rs 4 billion for the creation of additional infrastructure. This proposed investment will be funded through a combination of debt and equity. According to a joint company release, the combined entity will have a tenancy of 1.6x.

According to R. Haresh, chairman, TVS Interconnect, the merger of ITIL and Ascend is synergistic and provides the stakeholders of both companies huge benefits in terms of a larger management team, increased scale, a pan-Indian footprint and significant operational efficiencies.

The proposed merger is likely to increase the company’s revenue from around Rs 600 million reported in 2009-10 to about Rs 1.6 billion in 2010-11.

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