Carlyle and TPG are in talks over a potential stake acquisition in Reliance Infratel, the tower business of mobile operator Reliance Communications (RCom), according to media reports. Other private equity firms, including Apax Partners and Blackstone,…
Carlyle and TPG are in talks over a potential stake acquisition in Reliance Infratel, the tower business of mobile operator Reliance Communications (RCom), according to media reports. Other private equity firms, including Apax Partners and Blackstone, are also reportedly considering a stake purchase.
In late May, RCom had announced that it received offers from several parties for Infratel: “The board noted that, based on the indicative offers, completion of such a transaction would facilitate RCom’s stated objectives of achieving a substantial reduction of its overall debt position, and staying well within its target long term leverage ratios.” This was in response to suggestions that the mobile operator, saddled with about US$7bn in net debt, was struggling to sell 50,000 of the Infratel towers.
About a year ago, RCom had agreed an US$11bn tower merger between Infratel and another towerco, GTL, but this collapsed last summer on alleged valuation differences.
More recently, in late March, US-based independent towerco American Tower was quoted saying that it was not interested in Infratel, since its Indian efforts were completely focused on consolidating the towers it acquired from Essar Telecom Infrastructure.
That same month, RCom signed a US$1.93bn syndicated loan with China Development Bank (CDB) to refinance part of its debt used for 3G spectrum fee payment and equipment imports from Chinese vendors. The company recently announced that it had drawn the third and final tranche of the facility worth Rs12bn (US$268m).
State-owned telco MTNL is looking to restructure parts of its Rs70bn (US$1.55bn) loan taken out to buy 3G and BWA spectrum last summer, according to local reports.
The company is seeking to convert about Rs30bn (US$665m) into a seven-year debt facility. In June last year, MTNL said it was looking for local banks to commit to a loan to finance its recently received 3G spectrum.
MTNL said it was seeking lenders for one-year, two-year and three-year tranches that could be repaid prior to their maturity without any additional cost to the borrower.
MTNL has already restructured about Rs35bn (US$776m) of the Rs70bn loan by repaying Rs5bn (US$111m) and reaching an agreement with two state-owned banks for the remaining Rs30bn (US$665m).
The government has asked MTNL to “synergise” its operations with those of BSNL.
In late March, it was reported the Department of Telecommunications had revived plans to combine BSNL and MTNL, after such a move was rejected three years earlier by former minister A. Raja, who is currently under investigation as part of the presumed 2G scam.
Norwegian incumbent Telenor has reportedly asked Sanjay Chandra, the former chairman of its local subsidiary Unitech Wireless (Uninor), to resign from the board following his alleged involvement in the 2G scam.
Telenor was quoted as saying that Chandra, who is currently in judicial custody, had been asked to step down from the board for the duration of the trial.
In late April, Chandra resigned from his role as chairman following pressure from Telenor, which together with local real estate group Unitech owns the JV.
Although he is among nine people being charged by the Central Bureau of Investigation as part of its inquiry into the scam, Chandra nonetheless has remained on Uninor’s board.
The bail hearings of Chandra, along with three executives from Reliance ADA group and a director at real estate group DB Realty, were recently denied, meaning that they will remain in judicial custody.
State-owned telco Bharat Sanchar Nigam (BSNL) is looking to create a separate entity for its 40,000 telecom towers, according to reports.
A stake in the new business will be sold to private equity investors in order to create an additional source of revenue for the struggling company. The towers could be valued at between Rs160bn (US$3.5bn) and Rs200bn (US$4.4bn). This speculation came just a few days after BSNL was reportedly in discussions with several operators, including Bharti Airtel, Vodafone, Idea and RCom, about potential tower-sharing agreements.
