Brookfield Deal With RCom Stumbles But Has Others in Their Sights

Canada’s Brookfield Asset Management hasn’t cooled its ardor for telecom tower portfolios in India, even after talks to acquire over 40,000 towers from debt-laden Reliance Communications hit a snag.

The deal with Brookfield hinged on Reliance Communications merging its mobile operations with rival Aircel, but the merger was called off last month due to regulatory delays and legal uncertainties, according to Gears of Biz.

“The merger will not proceed and therefore our transaction as previously announced will not proceed either. However, we continue to monitor the evolving situation to determine if revised terms can be agreed upon,” Brookfield Infrastructure Partners said in an SEC filing on November 3. 

India’s largest phone carrier, Bharti Airtel, said on Tuesday it had been approached by global investors interested in a controlling stake in its tower unit Bharti Infratel. The news of the approach from unidentified investors comes a day after Bharti Infratel said it was considering buying the rest of Indus Towers, the biggest tower operator in India.  

Indus Towers, with nearly 123,000 towers, is owned 42 percent each by Bharti Infratel and Vodafone’s Indian unit. Third-ranked mobile carrier Idea Cellular, along with its associate, owns the remainder.

Indian media have reported a consortium led by private equity firm KKR & Co LP is eyeing both Bharti Infratel and Indus Towers.

RCom, led by billionaire Anil Ambani, had 443 billion Indian rupees ($6.86 billion) of net debt as of March, making it the most leveraged among listed Indian telecom companies. The debt load has spooked investors, sending RCom’s shares tumbling this year amid worries about whether it could pay back creditors at a time when profits across the sector are slumping due to stiff competition.

To shed debt, telecom companies are increasingly looking to spin off their mobile mast businesses while focussing on core mobile services.

November 7, 2017                 

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