Reliance Communications signs deal to sell tower business

New Delhi: Reliance Communications on Wednesday signed binding agreements with Canada-based Brookfield Infrastructure and institutional partners to sell its tower for an upfront cash payment of Rs 11,000 crore.

RCom will “also receive B Class non-voting shares in the tower company, providing 49 per cent future economic upside from the business based on certain conditions”, the company said in a statement. RCom will utilise the cash proceeds solely to reduce debt, it said.

The tower business will be demerged into a separate company, to be 100 per cent owned and independently managed by Brookfield Infrastructure. The deal represents the largest-ever investment by an overseas financial investor in the infrastructure sector in India.

The Anil Ambani-promoted RCom, and brother Mukesh Ambani's 4G telecom venture Reliance Jio will continue as major long-term tenants (of the tower company).

“RCom expects significant future value creation based on growth in tenancies from accelerating data consumption,” the statement added.