RCom to sell tower, optic fibre business to PE firms

RCom intends to utilise the proceeds of the proposed transaction to reduce its debt, which is estimated at about Rs 40,000 crore.

Reliance Communications, part of Anil Ambani-led group, has signed a pact to sell its tower and optic fibre assets in India to private equity firms TPG and Tillman Global in a deal estimated at about Rs 30,000 crore (Rs 300 billion).

RCom intends to utilise the proceeds of the proposed transaction to reduce its debt, which is estimated at about Rs 40,000 crore (Rs 400 billion).

The company said in a statement that "a non-binding term sheet" has been signed for the proposed acquisition of RCom's nationwide tower assets and related infrastructure by Tillman and TPG Asia.

While the company did not disclose the deal size, sources said the proposed transaction values RCom's mobile towers at about Rs 22,000 crore (Rs 220 billion) and the valuation of the related infrastructure including optic fibre assets, is estimated at about Rs 7,000-8,000 crore (Rs 70-80 billion). This would be one of the biggest transactions in the Indian telecom sector.

The company said the realisation of the deal proceeds would help bring down its interest cost by 75 per cent to Rs 600 crore (Rs 6 billion) a year.

RCom said it will continue as an anchor tenant on the tower assets, under a long term agreement, for its integrated telecommunications business.

"Tillman and TPG will also evaluate purchase of RCom's extensive nationwide inter-city and intra-city optic fibre assets, in a separate and independent transaction," the statement added.