RCom signed binding agreements with Canada-based Brookfield Infrastructure and institutional partners to sell its tower business for an upfront cash payment of INR 11,000 crore.
RCom will also receive B Class non-voting shares in the tower company, providing 49% future economic upside from the business based on certain conditions, according to the company.
RCom will utilize the cash proceeds solely to reduce debt.
The tower business will be demerged into a separate company, to be 100% owned and independently managed by Brookfield Infrastructure.
The deal represents the largest-ever investment by an overseas financial investor in the infrastructure sector in India.
The ADAG-promoted RCom, and Mukesh Ambani's 4G telecom venture Reliance Jio will continue as major long-term tenants (of the tower company).
RCom said the combination of its wireless business with Aircel and monetization of tower operations will together reduce the company debt by Rs 31,000 crore ($4.6 billion), or nearly 70%.
RCom will continue to hold 50% stake in Aircel JV and 49% upside in tower business to be monetised at an appropriate time to further reduce debt significantly.
About Reliance Communications- Headquarters: Navi Mumbai
- CEO: Vinod Sawhny (Feb 10, 2014)
- Subsidiaries: Reliance Digital TV, Global Cloud Xchange, Reliance Globalcom Limited, Reliance - Big TV Limited
- Parent organisation: Reliance Anil Dhirubhai Ambani Group
