Reliance To Divest Jio’s Tower Assets To Brookfield For Rs 25,215 Crore
Canada's Brookfield Infrastructure Partners LP will invest Rs 25,215 crore in telecom tower assets of Reliance Industries Ltd., the Indian firm said on Monday.
Reliance Industrial Investments and Holdings Ltd. has signed binding agreements with Brookfield Infrastructure Partners and its institutional partners for an investment of
Rs 25,215 crore in the units to be issued by Tower Infrastructure Trust, according to an exchange filing.
At the closing of transaction, the Tower Infrastructure Trust will own 100 percent of Reliance Jio lnfratel Pvt. Ltd. Jio is an anchor tenant of the tower portfolio under a 30-year Master Services Agreement.
Under the deal, Reliance Industrial Investments, the sponsor of Tower Infrastructure Trust, would issue units in the trust to Brookfield affiliate BIF IV Jarvis India and some co-investors. This is the single largest foreign investment in an Indian infrastructure vehicle.
After the deal is closed, the Canadian alternative assets manager, Brookfield and its partners would become sponsors of the trust, holding 100 percent of India's largest telecom tower company with 130,000 towers through Tower Infrastructure Trust, while the RIL subsidiary would become a co-sponsor, but will hold no units.
Proceeds from the investment by Brookfield and long-term loans will be used to repay existing financial liabilities of Reliance Jio Infratel Pvt. Ltd., including loans extended by RIL. It owes Rs 12,000 crore to the Mukesh Ambani-led firm.
"At the closing of the transaction, the Trust will own 100 percent of the issued and paid-up equity share capital of Reliance Jio lnfratel Pvt. Ltd.," the statement said.
Reliance Jio Infratel has a current portfolio of around 130,000 telecom towers that forms the infrastructure backbone of Reliance Jio Infocomm Ltd.’s network and has plans to expand this to 175,000 towers. Reliance Jio is an anchor tenant of the tower portfolio under a 30-year Master Services Agreement.
"We are pleased to enter into this long and strategic relationship with Brookfield, which is one of the largest and most respected managers of infrastructure assets globally,” said Ambani, chairman and managing director of RIL. "We are confident of Brookfield's abilities to manage this large portfolio of high-quality infrastructure assets and further enhancing value creation opportunities. This transaction demonstrates the belief of global investors in the potential of India's digital opportunity.”
The completion of the Reliance-Brookfield deal is subject to certain regulatory approvals, which are expected shortly, the statement said.