Reliance Jio, the Mukesh Ambani-led 4G telco is reportedly planning to buy Anil Ambani-led Reliance Communications' tower unit and Indian fiber assets. Besides Jio, a number of companies, including Indus Towers, ATC, Bharti Infratel, Brookfield Infrastructure, Sistema JSFC, Tillman Global Holdings, TPG Capital, Carlyle Group, I-Squared Capital and Gateway Partners have shown interest to buy RCom's tower unit, various media outlets reported.
RCom on Tuesday has also informed the Bombay Stock Exchange that it was renegotiating the tower deal with Brookfield Infrastructure Group and other interested parties.
All of these 11 bidders have submitted expressions of interest (EoIs) to buy 100% stake in RCom's tower unit, Reliance Infratel.
The development follows Brookfield Infrastructure's move to call off its agreement with RCom to buy the telco's tower unit, which has a 42,600-strong towers portfolio and domestic fiber assets. The deal was pegged at Rs 11,000 crore, and the reason behind the deal is RCom’s lapsed merger deal with Aircel last month. The asset management firm is now renegotiating the deal.
The primary reason behind RCom’s deal with Brookfield is to reduce the debt. RCom currently has a debt of Rs. 45,000 crore and it looked to reduce the debt by almost 60% with the deals from Aircel and Brookfield. However, both the deals have now cancelled, and RCom itself will function as an MVNO operator.
RCom's domestic fibre assets are valued at roughly Rs 4,000 crore, its executive director, Punit Garg said recently. The telco has around 1.78 lakh route kms of domestic fibre assets.
According to an ET report, all of these 11 bidders have submitted their respective bids to SBI Capital Markets, which is the adviser appointed by RCom’s lenders to manage a competitive process of monetizing the telco’s assets, including towers and domestic fibre.
Other media reports said that some telcos and private equity players have also shown early interest to acquire a 51% stake in RCom. RCom had presented a zero write-off plan to lenders as part of its ongoing strategic debt restructuring. Under the plan, banks can convert a portion of RCom’s debt for a 51% stake.
RCom recently announced that it’s exiting the wireless business and will adopt a 4G-only focussed approach. RCom also confirmed that other buyers can also bid to purchase the RCom assets. The operator is looking to offer mobile virtual network operator (MVNO) as a full-fledged 4G operator. Currently, RCom is looking to scrap its 2G and 3G business.