RCom mulls revised tower deal in wake of failed merger - Mobile World Live

RCom mulls revised tower deal in wake of failed merger

03 OCT 2017

Reliance Communications (RCom) is in talks to sell its entire tower arm to Canadian investment company Brookfield Asset Management following the collapse of a proposed merger with Aircel.

According to sources quoted by Business Standard, Brookfield is reassessing a proposed deal penned in October 2016 for 51 per cent of Reliance Infratel’s assets, on grounds the death of the proposed merger between Aircel and RCom reduces the guaranteed income from the towers.

When the proposal was signed, Brookfield assumed the infrastructure would be used by both Reliance Communications and Aircel post merger. With the collapse of the deal, the towers would have a lower guaranteed usage and, as a result, pose a greater risk to return on investment.

RCom is said to be now open to selling the whole unit rather than retaining a minority stake.

Negotiating new terms for its tower deal follows a turbulent month for RCom: in addition to ditching the Aircel deal, RCom faces an Ericsson lawsuit covering a debt of INR11.56 billion ($180 million) the vendor says RCom owes.

RCom recorded a loss of INR12.85 billion in the year to end-March, its first ever annual loss. At the time the operator had debt of INR440 billion, which it hoped to pay down using funds from the sale of its Infratel stake.

 

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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