The American Tower Company (ATC) has been looking to sell its Indian unit for quite some time. I Squared Capital, a US-based infra private equity firm, is the leading player to buy off the company. The issue with ATC's Indian unit is that its financials have been hit due to non-payment by a key customer, Vodafone Idea Limited (VIL). Back in September, ATC had to record a goodwill impairment charge of $322 million related to the Indian unit on its books.
The valuation of the company after recording the impairment charge was $2.2 billion. It is worth noting that as more time passes by, the valuation of ATC's Indian unit is coming down, according to a BusinessStandard report.
Read More - Vodafone Idea Expects Promoter Equity Infusion to Conclude this Quarter
Rod Smith, executive vice president, chief financial officer, and treasurer of ATC, said that the final outcome related to the company's future (Indian unit) will be communicated with the shareholders before the end of the year. ATC India is the country's third-largest independent tower company. It has towers/sites present in all telecom circles. There are over 77,000 telecom sites being operated by ATC India, resulting in the tower company capturing over 17% of the market.
Vodafone Idea had issued OCDs (optionally convertible debentures) to ATC amounting to Rs 1600 crore. The first tranche can be redeemed by ATC after 18 months from the date of issue (the OCDs were issued in February 2023). ATC India can redeem the OCDs in two tranches of Rs 800 crore each.
Read More - Vi Gets Rs 2000 Crore from HDFC Bank
The non-payment of dues by Vodafone Idea is the biggest hurdle for ATC India. Vodafone Idea accounted for about 44% of ATC's business at the end of December 31, 2022. The company's inability to clear the dues owed to the tower company has hurt ATC's finances, given the fact that it accounted for almost half of its business in India.
