Brookfield To Invest Rs 25,000 Crore In Reliance’s Tower Trust
Brookfield, along with other investors, agreed to invest in a trust that controls RIL’s telecom tower infrastructure assets.
Brookfield Asset Management Inc., along with other investors, agreed to invest Rs 25,215 crore in a trust that controls Reliance Industries Ltd.'s telecom tower infrastructure assets.
The Canadian investment firm and other unnamed investors will invest in the units proposed to be issued by Tower Infrastructure Trust, which is sponsored by RIL's wholly-owned unit Reliance Industrial Investments and Holdings Ltd., according to an exchange filing.
The trust currently owns 51 percent stake in Reliance Jio lnfratel Pvt Ltd., the operating company of Reliance Jio Infocomm Ltd.’s tower assets. As part of the transaction, the trust will acquire the remaining 49 percent stake, currently held by RIL through Reliance Industrial Investments and Holdings.
RIL will get Rs 12,000 crore from the transaction, and will remain a co-sponsor of the trust, Deputy Chief Financial Officer V Srikanth said in an analyst meeting.
The deal is subject to various conditions, including receipt of requisite government and regulatory approvals.
"With Rs 25,000 crore, they will buy out 100 percent of the equity of the operating tower company, and they can inject the balance amount into the operating company through debt," Srikanth said.
RIL hived off most of its fibre assets and towers into two infrastructure investment trusts to pare debt in the quarter ended March, hoping that investors seeking a piece of its telecom bet will find it lucrative. The oil-to-retail company transferred liabilities worth Rs 1,07,300 crore to the two InvITs. Along with the preference shares, the total debt of the infrastructure trusts added up to Rs 1,85,400 crore.
The current deal only pertains to tower assets. Reliance Jio lnfratel’s debt will stand at Rs 16,000 crore after the transaction is completed, Srikanth said. The debt could increase to as much Rs 30,000 crore as Brookfield completes ongoing expansion projects, he added, without specifying a timeline.
Brookfield, Mukesh Ambani Join Hands, Again
The tower deal is Brookfield's second investment this year in a venture controlled by Mukesh Ambani. In March, India Investment Trust, sponsored by Brookfield, agreed to buy Ambani’s privately owned East West Pipeline Ltd. for Rs 13,000 crore.