RCOM sees interest for 51% stake in Infratel

30 Jun 2015

American Tower Corp (ATC) and private equity firm Carlyle are currently the top bidders for a 51% stake in Reliance Communications’ (RCOM’s) tower unit, Reliance Infratel, the Economic Times writes, citing people familiar with the matter. Five to six companies have shown an interest and the initial bids value the company at INR200 billion-INR240 billion (USD3.13 billion-USD3.76 billion), including INR80 billion in debt. RCOM is looking to offload its 96% stake in the passive infrastructure firm to concentrate on its telecom business and pare its debt, but will begin by selling a majority interest in the company before gradually reducing its ownership further. An unnamed source was quoted as saying that RCOM may choose not to complete its exit from the business, as ‘there’s still a lot of growth in the tower sector.’ The source went on to say that RCOM could reduce its debt by around INR140 billion: ‘At current valuations, RCOM can net close to INR60 billion from the stake sale. On selling its controlling stake, the INR80 billion that it has of debt for Reliance Infratel will get transferred to Infratel and off RCOM’s books, thus lowering debt by some INR140 billion.’

India, Reliance Communications (RCOM)