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Brookfield Infrastructure Partners to invest Rs 25,215 cr in telecom tower assets of RIL

Canada's Brookfield Infrastructure Partners LP will invest Rs 25,215 crore in telecom tower assets of Reliance Industries.

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Last Updated: Dec 17, 2019, 09.44 AM IST|Original: Dec 16, 2019, 10.46 AM IST
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RIIHL, a wholly-owned subsidiary of RIL, has entered into binding agreements with Brookfield Infrastructure Partners LP.

MUMBAI: Brookfield Infrastructure Partners, the Canadian asset management company, will invest Rs 25,215 crore ($3.55 billion) in the telecom tower assets of Mukesh Ambani’s Reliance Industries in a deal that will help strengthen the balance sheet of Reliance Jio Infocomm.

Reliance Industrial Investments & Holdings Ltd., a wholly owned unit of Reliance Industries, has entered into binding agreements with Brookfield Infrastructure and its institutional partners, which will invest the amount in units to be issued by the Tower Infrastructure Trust, the Indian oil-to-retail conglomerate said in a notice to the stock exchanges on Monday.

“Closing of the transaction is subject to certain regulatory approvals, which are expected shortly,” Reliance added.

Reliance said that after the transaction is completed, the Trust will own 100% of the equity share capital of Reliance Jio Infratel Private Ltd. (RJIPL), the unit that houses the telecom tower assets.

The Trust currently owns 51% of RJIPL, while Reliance Industries holds the remaining 49%. On receiving the funds from Brookfield, the Trust will buy Reliance’s 49% stake, repay Rs 12,000 crore to Jio and clear other financial liabilities of RJIPL. Jio will then transfer Rs 12,000 crore to Reliance against certain financial liabilities owed to the parent company.

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On completion of the proposed deal, RJIPL would have debt of Rs 16,000 crore.

“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 Mukesh Ambani, chairman of Reliance Industries. “This transaction demonstrates the belief of global investors in the potential of India’s digital opportunity.”

RJIPL owns about 130,000 communication towers that form the backbone of Jio’s network and plans to take the total to 175,000, Reliance said. That would top the 163,000 towers owned by rivals Bharti Infratel and Indus Towers together.

Jio had signed up to be the anchor tenant of RJIPL’s towers for 30 years. Like Jio, Bharti Airtel and Vodafone Idea hived off their tower assets to attract investment and ease debt.

The three telcos are trying to strengthen their balance sheets by reducing debt amid a continuing need to invest in 4G networks, besides preparing for the upcoming spectrum auction where 5G airwaves will be up for sale for the first time.

This will be Brookfield’s second investment this year in a venture controlled by Mukesh Ambani. In March, it agreed to buy the lossmaking East-West Pipeline, earlier known as Reliance Gas Transportation Infrastructure, at an enterprise valuation of Rs 13,000 crore.

Reliance shares fell 1% to Rs 1,566.55 at the close on the BSE.

Also Read

CCI approves Reliance's divestment of Jio tower assets

Brookfield Infrastructure Partners to pump Rs 25,215 crore into Reliance’s tower assets

Jio gets NCLT 'Ok' to demerge fibre, tower assets

Power Grid to offer up to 20% of tower assets to telecom firms

American Tower Corp eyeing more tower assets

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