R-Com says looking to monetise tower assets

Anil Ambani-controlled Reliance Communications Ltd (R-Com) has asked merchant bankers to give suggestions on how to monetise its tower and fibre assets in a subsidiary in order to reduce its debt in the current financial year. As of 30 September 2014, R-Com’s consolidated debt was at Rs31,839.00 crore. R-Com said it has already announced plans to substantially reduce the company’s overall debt and it keeps exploring and analyzing various strategic alternatives. On Wednesday, The Economic Times reported that R-Com, India’s fourth-largest telecom carrier, is looking to sell a majority stake in its subsidiary Reliance Infratel Ltd, the country’s third largest tower company, at a valuation of Rs20,000-25,000 crore in a bid to focus on core operations and cut debt. The report, citing unnamed sources, suggested that R-Com wants to sell its entire stake in Reliance Infratel but may settle for a 51% sale at the least. “As one of such alternatives, the company has invited certain investment banks to make proposals for running a process to monetise the valuable tower and fibre assets held in its subsidiary, Reliance Infratel Ltd. within the current financial year. The company will make further disclosures, as and when these developments lead to a disclosable event,” R-Com said in a filing to BSE on Wednesday. R-Com has sought bids from investment bankers such as Morgan Stanley, Bank of America Merrill Lynch and JM Financial among others. As of February, 2011, Reliance Infratel’s wireless towers portfolio comprised 45,443 towers with a presence in all 23 telecom ‘circles’, making it the largest tower owner in India, according to the company’s website. In February this year, Bharti Airtel Ltd, India’s biggest mobile phone operator by users, raised $310 million through a secondary share sale in its mobile tower unit Bharti Infratel Ltd. Bharti Airtel used the funds primarily to reduce debt. Local mobile operators have been selling towers to specialist tower firms and leasing them back to cut maintenance costs and debt.