Indian tower joint venture Viom Networks’ fundraising plans could see Tata Teleservices more than halve its 54% stake in the company, according to Viom vice chairman Sunil Kanoria.
Kanoria told the Economic Times that Tata Teleservices, the mobile arm…
Indian tower joint venture Viom Networks’ fundraising plans could see Tata Teleservices more than halve its 54% stake in the company, according to Viom vice chairman Sunil Kanoria.
Kanoria told the Economic Times that Tata Teleservices, the mobile arm of conglomerate Tata Group, “definitely has no issues” with reducing its stake. The vice chairman said he expects Tata to retain a 26% stake in Viom as it considers the JV a strategic asset.
According to him, Viom co-owner Srei Infrastructure is also open to reducing its 18.5% stake by a few percentage points for the right price.
Kanoria explained that the towerco is in talks with six banks to ascertain the best option for raising capital. The company is also in contact with several PE firms interested in investing in it.
The fundraising will see some of Viom’s existing private equity investors replaced by new ones, he said. Current investors IDFC Private Equity, SBI Macquarie, Oman Investment Fund and the Government of Singapore Investment Corporation (GIC) own a combined 27.5% stake in the company.
Viom intends to use the new capital to expand its network of towers in India and strengthen its global operations, Kanoria said. Subsidiary Viom Networks Singapore will initially look at tower management opportunities in Myanmar and eventually in markets such as Malaysia, Indonesia and Bangladesh. The company is also considering consolidation opportunities in foreign markets such as Malaysia and Indonesia, Kanoria said.
A Viom spokesperson confirmed that the tower operator may ask its board and shareholders to approve plans to raise primary growth capital, potentially through a foreign listing, private placement or private equity. “[A]ny of those options could be explored,” he said.
The spokesperson added that Viom plans to add an extra 10,000 to 15,000 towers to its portfolio over the next few years. He noted that the company has cut its net debt by 15% to Rs70bn (US$1.13bn) over the last 18 months due to better cash management.
Last October, an Economic Times report stated that Tata and Srei were reconsidering options to sell a controlling stake in Viom and had mandated Credit Suisse and Citigroup to advise on formal talks with private equity firms and international towercos.
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