Brookfield, a Toronto-based equity firm has invested more than $2 billion in the country’s infrastructure sector and media reports suggest that it intends to put in another $2 billion to double its asset portfolio in India, reports the Times of India.
They have agreed to buy a majority stake of 51 percent in Anil Ambani-controlled Reliance Communications’ (RCom) mobile phone tower unit for $1.7 billion. This will be the largest acquisition in the country’s mobile phone tower segment. Last year, American Tower bought a 51 percent stake in Viom Networks for Rs $1.2 billion, the Times said.
RCom, which has signed a ‘non-binding’ term sheet with Brookfield, will hold the remaining 49 percent in the tower business, which is currently housed under Reliance Infratel.
RCom owns 96 percent of Reliance Infratel and the rest is held by institutional investors — Quantum, NSR Partners, Galleon, HSBC, Drawbridge Towers and Investment Partners. All these investors, which put in $287 million in 2007, will exit Reliance Infratel, the Times said.
Brookfield, the world’s second biggest fund with $250-billion assets under management, entered the scene after RCom’s deal with TPG-Tillman for the tower business collapsed early this year.
RCom said that Toronto-based Brookfield will pay $1.7B upfront, which it would use entirely to reduce debt. Currently, RCom, the most leveraged among listed mobile phone carriers, has a debt of $6 billion. Another $2.1 billion debt will be retired after the company merges with Aircel., the Times said.
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