American Tower, Carlyle lead race for Rel Infratel majority

Via The Economic Times | Jun 29, 2015

American Tower Corp and private equity firm Carlyle are among the top initial bi
dders seeking to acquire a 51 percent stake in telecom tower operator Reliance I
nfratel from parent Reliance Communications, people familiar with the matter sai
d. "About 5-6 companies have shown interest...The bids value Reliance Infratel a
t Rs 20,000-24,000 crore, but these are initial bids," one of the people said. T
he valuation includes about Rs 8,000 crore of debt. Standard Chartered and SBI C
apital Markets are running the stake sale process, in which due diligence is exp
ected to be carried out in July-August, followed by management presentations and
definitive bids. The transaction is expected to close by September end or Octob
er, the person said. "The intention is for RCom to own 49 percent at the first g
o and then gradually reduce it further. It may look at a complete exit, but that
's some time away as there's still a lot of growth in the telecom tower sector,"
he added.
Prospects for tower operators have improved since 2012 when mobile phone compani
es scaled down operations or had their licences cancelled by the Supreme Court.
Competition has eased, allowing telcos to improve cash flows that can be investe
d on expanding and upgrading networks. Tower companies are also signing up opera
tors for the rollout of 4G networks. "RCom is actively pursuing several initiati
ves to achieve significant reduction of its overall debt levels within the curre
nt financial year, including, inter-alia, monetisation of its controlling stake
in Reliance Infratel Ltd. Further announcements will be made at the appropriate
stage," a spokesperson said. The person quoted initially said Bharti Infratel, I
ndia's No. 2 telecom tower company, was one of the entities that has shown inter
est in acquiring a stake in Reliance Infratel. However, a Bharti spokesperson sa
id, "We strongly deny these rumours."