The flagship company of the Anil Ambani group, Reliance Communications Ltd (RCom), will combine its telecom towers business with GTL Infrastructure Ltd in a deal that will create a transmission network valued at Rs50,000 crore, the two companies said on Sunday.
The union of RCom unit Reliance Infratel Ltd and GTL, a listed entity promoted by Manoj Tirodkar, will create the world’s largest independent telecom infrastructure firm, operating 80,000 towers, with 125,000 tenancies from 10 telecom firms. Financial terms of the deal were not disclosed.
RCom would receive a mix of cash and stock under the terms of the transaction. Around two million shareholders of RCom and a clutch of private equity (PE) investors in Infratel would be allotted free shares of GTL. RCom owns 95% in Infratel with the remaining held by PE investors.
The cash infusion into RCom would lead to “substantial reduction of its consolidated gross debt and improved leverage ratios, contributing to enhanced financial flexibility”, RCom said in a statement.
The agreement is one of India’s largest M&A deals, just shy of the $11.1 billion price tag Vodafone paid for Hutchison’s 67% stake in cellco Hutchison Essar (now Vodafone India) in 2007.
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