‘Reliance-GTL’ Infrastructure asset deal worth US$9 billion on Halt
Reliance Infratel, the tower subsidiary of Reliance Communication, and GTL Infrastructure have decided to suspend their deal without stating any reason.
According to Reliance Infratel, Reliance Communication is now in discussions with certain other strategic and financial investors to pursue a similar transaction aimed at significant reduction in the company’s debt from the passive infrastructure and related assets in its 95% owned subsidiary. Owing to the provisions of mutual confidential agreements, RCom cannot provide any comment on the reasons for the inability to conclude a transaction with GTL Infrastructure.
The deal, which was said to be the major domestic acquisition of this year, was likely to help the consolidation in India’s telecoms industry. Reliance in talks to sell 26% of itself to Etisalat, a UAE-based telecommunications services provider.
According to an analyst with IIFL, Reliance has net debt of $7bn, giving it a ratio of net debt to earnings before interest, taxation, depreciation and amortization of 4.5 times. The deal with GTL, under which the tower company, which is controlled by multi-millionaire Manoj Tirodkar, would have bought nearly 50,000 towers from Reliance, would have reduced the mobile operator’s net debt to EBITDA two – three times. It would certainly have put RCom on a forward-facing trajectory.
According to Reliance, the non-binding term sheet with GTL had expired, enabling it to talk to other parties.
Reliance plans IPO for Infrastructure arm. Hopes to raise $1Bn for 10% via IPO.
India’s second largest Mobile Operator, Reliance Communication plans to seek regulatory approval for selling 10% of Reliance Infratel (its infrastructure arm) for close to $1Bn.
Reliance Infratel sold a 5 percent stake to global investors for about $290 million in 2007. It had revenue of more than $1 Bn and a profit of $300 Mn in the year ended March 31, according to Billionaire Chairman Anil Ambani.
The share sale will help fund an expansion of the nationwide network of 48,000 towers at Reliance Infratel as demand for leasing networks is likely to double in the next couple of years according to Ambani.
S Tel & Reliance Infratel ink infrastructure agreement (India)
www.WirelessFederation.com/news: S Tel and Reliance Infratel have reportedly inked an infrastructure agreement for sharing telecom towers, transmission for BTS sites and fibre backbone for intercity connectivity.
The pact covers six circles – Orissa, Bihar, Himachal Pradesh, Northeast, Assam and Jammu and Kashmir where the telecom operator plans to roll out its GSM services soon.
