RCOM has entered into an agreement to transfer its telecom tower assets, currently under Reliance Infratel, to GTL Infrastructure Limited (GIL).

RCOM has entered into an agreement to transfer its telecom tower assets, currently under Reliance Infratel, to GTL Infrastructure Limited (GIL). About 54,000 Reliance Infratel and 32,000 GIL telecom towers will be spun off into a special purpose vehicle (SPV), which is valued at Rs 500 billion. GIL will pay RCOM about Rs 150 billion in cash and issue new shares to RCOM shareholders.
The SPV plans to dilute stake to a private equity investor, after which RCOM is likely to have at least a 26 per cent stake and GIL 30-35 per cent. The transaction will help RCOM reduce its debt obligation from about Rs 180 billion to Rs 150 billion. The deal involves the acquisition of only passive infrastructure and Reliance Infratel will continue to hold its optic fibre network and related assets. To finance its recent deal with RCOM, GIL will raise the necessary funds through a combination of equity and debt. GIL is in talks with potential private equity investors including Blackstone for the equity component, while the debt will be organised by Standard Chartered Bank and SBI Capital Markets.