India’s Reliance Communications has reportedly extended its exclusivity talks with US-based telecoms infrastructure firm Tillman Global Holdings and private equity firm TPG Asia. The initial pact would see the telco sell its tower assets and related infrastructure for a reported Rs215bn (US$3.17bn).
India’s Reliance Communications (NSE:RCOM) has reportedly extended its exclusivity talks with US-based telecoms infrastructure firm Tillman Global Holdings (TGH) and private equity firm TPG Asia.
The talks will continue for a further 15 days to resolve “some issues” outstanding but are on the right track, the Economic Times cited a person familiar saying.
Mumbai-based RCom entered into a non-binding agreement to sell its tower assets and related infrastructure to the two US firms in early December last year. The initial expiration date was today (15 January).
Under the initial agreement, the proposed deal, worth a reported Rs215bn (US$3.17bn), would see the assets transferred from RCom’s tower unit Reliance Infratel on a going concern basis into a separate special purpose vehicle owned by TGH and TPG.
RCom, India’s fourth largest mobile operator, would be an anchor tenant on the tower assets under a long-term managed services agreement.
Tillman, led by founder and former Orange and LightSquared CEO Sanjiv Ahuja, and TPG Asia, part of the US-based TPG group, will also look at purchasing RCom’s fibre optic assets in a separate transaction. Ahuja is also a co-founder of African towerco Eaton Towers, which says it has more than 5,000 towers in seven countries.
RCom, advised on the deal by Standard Chartered and SBI Capital Markets, would reportedly raise about Rs300bn (US$4.43bn) from the two transactions, using the proceeds to reduce a debt pile which had mounted to Rs399bn (US$6bn) at the end of September 2015.
RCom has a 96% stake in Reliance Infratel, the country’s second-largest towerco with nearly 45,000 masts, an extensive fibre optic network and estimated enterprise value of Rs210bn-Rs220bn (US$3.1bn-US$3.3bn).
RCom has declined comment, while TGH and TPG were not immediately available.
