India Markets

Brookfield, Reliance Industries set to ink tower deal

Brookfield Asset Management and billionaire Mukesh Ambani’s Reliance Industries are likely to sign a term sheet within 8-10 days for a telecom tower deal, a media report said.

The deal involves RIL selling unit Reliance Jio Infratel Pvt. Ltd’s portfolio of 170,000 towers to halve its telecom debt, The Economic Times reported, citing people close to the development. Ambani is also likely to invest in Jio’s towers in his personal capacity.

Reliance Jio Infratel is India’s biggest tower company which valued around Rs 36,000 crore ($5 billion) as of now. The valuation is likely to rise to $7 billion once the build-out phase is complete, report said.

A final agreement is remain to be sign early August, report said.

If the deal goes through, it would be the second transaction between Brookfield and Reliance. It leads a consortium that agreed to acquire a gas pipeline from companies controlled by Ambani for $1.9 billion.

Bharti Airtel and Vodafone Idea are planning to turn their proposed optic fibre network joint venture into an InvIT that can attract long-term investors, report said.

This move would also reduce the two companies’ debt and free up cash to compete with Reliance Jio Infocomm, the telecom arm of RIL.

The InvIT structure is an attractive proposition for investors such as global pension funds given the regular income and the tax benefits on the income.

The merged entity will have a network of 400,000 route km of optic fibre, the largest in the country, and will be valued at around Rs 35,000-40,000 crore, report said.

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