Anil Ambani-owned Reliance Communications (RCom) has signed a non-binding agreement with private equity firms TPG Asia and Tillman Global Holdings to sell its telecom towers and related infrastructure that counts with 45,000 tower assets.
The size of the deal was not disclosed but, according to sources, Reliance expected an enterprise value of around $3.5 billion.
The sale is key for Reliance Communications, the most-leveraged Indian telecoms carrier with $5.8 billion in net debt as of the end of March 2015. Past efforts to sell a stake in the unit or take it public failed to go through.
According to a press release of Reliance, Tillman and TPG would also evaluate purchase of its inter- and intra-city optical fibre assets in a separate deal and negotiations will take place simultaneously.
The non-binding agreement would be valid till January 15, 2106 and conclusion would be subject to due-diligence and regulatory approvals.
The tower assets are currently owned by Reliance Infratel, a 96% subsidiary of RCom. RCom will continue as an anchor tenant on the towers.
Indus Towers, a venture between Bharti, Vodafone and Idea, is the leading player in the Indian cellular tower industry with 116,454 towers, followed by Bharti Infratel with 86,397 towers. Bharti Infratel holds a 42 per cent stake in Indus Towers.
Mobile mast operators in India are seeing an increase in demand as carriers expand high-speed 3G and 4G internet services across the country.