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Debt-Ridden RCom Sells Majority Stakes In Towers Assets To Canadian Firm
Anil Ambani addresses a press conference in Mumbai. Photo credit: SAJJAD HUSSAIN/AFP/GettyImages
In what could be the largest foreign direct investment in India's infrastructure sector, a Canada-based group has signed a deal to acquire majority stakes in the tower assets of Reliance Communications (RCom) for Rs 11,000 crore.
The Anil Ambani-led company has sealed a "non-binding term sheet" with Brookfield Infrastructure Group, through which the Canadian firm would buy all the tower assets of the Indian company.
“RCom will receive an upfront cash payment of Rs 11,000 crore from the proposed transaction. RCom will also enjoy 49 per cent future economic upside from the towers business, based on certain conditions,” the company said.
RCom, which is reeling under heavy debt, plans to utilise the sale proceeds to cut financial liability. The Indian company will continue as an anchor tenant on the tower assets under a master service agreement for its integrated telecommunications business.
The two companies are expecting considerable growth in tenancies based on increasing 4G offerings by telecom operators in India. They also seek to cash in on the accelerating trends of data consumption, which are expected to significantly boost revenues and profitability of the towers business in the future.
With inputs from IANS.
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