The Cabinet will next week consider RCom’s deal with Brookfield Infrastructure Partners for the divestment of the former’s tower business in India, according to media reports. Canada-based Brookfield has proposed to buy 51% interest in Reliance Infratel worth Rs 11,000 crore.
The deal is a part of RCom’s transformation strategy which aims to reduce its net debt that stands at Rs 45000 crore.
The Cabinet’s nod will pave the way for the completion of RCom’s Brookfield tower transaction, which combined with the Aircel merger deal will help RCom pay off banks.
RCom had signed had inked the binding agreement with Brookfield Infrastructure on 21 December 2016. It has so far got approvals from its shareholders, the Competition Commission of India (CCI), the Securities and Exchange Board of India, stock exchanges, IP-1 and Corporate Registration.
RCom, according to reports, now requires approvals from its lenders and the National Company Law Tribunal (NCLT), which will take up the proposal on June 28.
The Anil Ambani-led telco will reach out to its lenders seeking the consent of the proposal transaction in last week of June, reports added. Brookfield Infrastructure’s investment will be the single-largest investment in the telecom infrastructure space in India.
RCom had earlier said that it will pay Rs 14,000 from proceeds of the Aircel deal, and Rs 11,000 crore from the Brookfield transaction to lenders before December 2017. RCom also plans to monetize part of its real estate to raise Rs 6,000 crore, and reduce overall debt from Rs 20,000 crore to Rs 14,000 crore.
According to reports, Reliance Infratel will be renamed as TowerCom Infrastructure, and Brookfield Infrastructure will buy 100% equity share capital in this new entity.