Brook­field, 2 Oth­ers Bid for Voda Tow­ers

It’s likely that win­ning bid­der may also get ac­cess to 9k Idea tow­ers

The Economic Times - - Companies: Pursuit Of Profit -

Baiju Kalesh & Sneha Shah

Mumbai: Global al­ter­na­tive as­set man­age­ment fund Brook­field, Amer­i­can Tower Corp (ATC) and lo­cal in­fras­truc­ture fund IDFC Project Eq­uity In­fra have sep­a­rately bid for the 11,000 in­di­vid­ual tow­ers of Voda­fone In­dia, val­ued at $600 mil­lion, two peo­ple with di­rect knowl­edge of the de­vel­op­ment told ET. “The bids were sub­mit­ted re­cently and the com­pany will en­ter into an ex­clu­siv­ity agree­ment with one of the bid­ders,” said one of the two per­sons quoted above.

“Ahead of their pro­posed merger, the two com­pa­nies (Voda­fone In­dia and Idea Cel­lu­lar) want to sell their tower assets as the merged en­tity will be as­set­light in na­ture,” said a sec­ond per­son quoted above.

While Voda­fone In­dia has 11,000 tow­ers, Kumar Man­galam Birla-owned Idea Cel­lu­lar has about 9,000 tow­ers. Mor­gan Stan­ley is ad­vis­ing Voda­fone and Bank of Amer­ica Mer­rill Lynch is the banker to Idea.

Both par­ties have ear­lier said they in­tended to sell their stand­alone tower assets and stakes in In­dus, the world’s largest tele­com tow­ers com­pany, be­fore the com­ple­tion of the broader deal. The merger, the two com­pa­nies be­lieve, should help re­duce debt in the com­bined en­tity of about ₹ 1.07 lakh crore.

In March this year, In­dia’s sec­ond-largest mo­bile tele­phone com­pany Voda­fone In­dia de­cided to merge with the third­largest telco Idea Cel­lu­lar to take on the Re­liance Group’s new tele­com push through Re­liance Jio In­fo­comm.

The merger, which re­ceived the ap­proval from an­titrust reg­u­la­tor Com­pe­ti­tion Com­mis­sion of In­dia, will cre­ate the coun­try’s largest mo­bile tele­phony com­pany by sub­scribers.

“The win­ning bid­der for Voda­fone’s tower assets will get ac­cess to the 9,000 tow­ers of Idea Cel­lu­lar and the first right of re­fusal,” an­other per­son in­volved in the deal said. “Voda­fone’s tower assets are be­ing val­ued at around $600 mil­lion.”

This deal does not in­clude Voda­fone’s 24% in In­dus, which op­er­ates 122,000 tow­ers.

Bharti In­fratel owns 42% stake in In­dus Tow­ers, and the rest is owned by Idea Cel­lu­lar and pri­vate eq­uity fund Prov­i­dence.

Emailed queries to the spokesper­sons of Voda­fone In­dia, Brook­field, ATC, and IDFC did not elicit any re­sponse.

Mo­bile com­pa­nies have been try­ing to mon­e­tise in­fras­truc­ture assets to re­duce heavy debt. “It is not a core business at all for tel­cos….most tel­cos don’t own tow­ers at all,” said a se­nior of­fi­cial of a mo­bile tele­phony com­pany, when asked about mon­etis­ing the tower assets.

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