In its SEC 10Q filing for 3Q24, American Tower (NYSE: AMT) shows that it incurred a $1.2 billion loss on the recent sale of its India unit, ATC Telecom Infrastructure Pvt Ltd., also referred to as ATC India. The company stated that the loss was primarily a result of the reclassification of the company’s cumulative translation adjustment (CTA) in India, upon exiting the market, of $1.1 billion. A CTA is an accounting entry reflecting gains and losses from fluctuating exchange rates over time. CTAs are a key part of financial statements for U.S. companies with global operations and are required by the Financial Accounting Standards Board.
Recall in 2023, Inside Towers reported that American Tower undertook a strategic review of its India operations, intended to evaluate the appropriate level of exposure to the India market within its global portfolio of communications assets, and to assess opportunities for repurposing capital to drive long-term shareholder value and sustained growth.
On January 4, 2024, the company, through its subsidiaries, ATC Asia Pacific and ATC India entered into an agreement with Data Infrastructure Trust (DIT), an infrastructure investment trust sponsored by an affiliate of Toronto, Ontario-based Brookfield Asset Management (NYSE: BAM). In September, DIT along with investors, British Columbia Investment Management Corp and GIC, acquired a 100 percent ownership interest in ATC India for an enterprise value of about $2.2 billion at the time, Inside Towers reported.
Under the terms of the agreement, the deal could actually be worth up to approximately $2.5 billion, including the value of Vodafone Idea’s (VI) optionally convertible debentures (OCDs) and shares that ATC India held as collateral against on certain existing VI receivables; the repayment of existing intercompany debt; and, the repayment, or assumption, of American Tower’s existing term loan in India, by DIT.
During the nine months ended September 30, 2024, ATC India distributed approximately $354 million to American Tower Corporation. That amount included the value of the VI shares and OCDs and the satisfaction of the economic benefit associated with the rights to payments on certain existing customer receivables. These distributions were deducted from the total aggregate consideration received by American Tower from DIT at closing. The company added that it used the proceeds from the ATC India transaction to repay existing indebtedness under its 2021 Multicurrency Credit Facility.
Furthermore, American Tower said that under the terms of its agreement, it is obligated to indemnify DIT with respect to certain tax-related liabilities that may arise from activities prior to the deal completion.
The ATC India deal is significant for American Tower. ATC India represented the largest portion of American Tower’s global operations, outside of its U.S. & Canada segment. At year-end 2023, ATC India accounted for 34 percent of the company’s total global communications sites, 10 percent of its total property revenue and five percent of its total towers segment operating profit.
By John Celentano, Inside Towers Business Editor
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