MUMBAI, INDIA Anil Ambani-backed Reliance Communications Ltd RComm, its assistant Reliance Infratel Ltd RINFRATEL, and GTL Infrastructure Ltd today have approved a Rs. 50,000 crore US$ 11 billion deal to originate the worlds largest independent telecom infrastructure company, neither owned nor controlled through any telecom operator.
This transformational deal will be implemented through a demerger of RINFRATELs turret assets into GTL Infrastructure, said a press release. Indias largest optic fibre network of over 200,000 km and related assets, forthwith owned by RINFRATEL will remain under RComms ownership.
The let loose said the proposal will lead to substantial unlocking of value, through cash infusion to RComm, leading to substantial reduction of its consolidated sensual debt and improved leverage ratios, contributing to enhanced financial flexibility.
It also said that RComms 2 million shareholders would receive shares of GTL Infra, which is listed on the exchanges, enabling their continued participation in coming time prospects of the high growth telecom infrastructure sector.
On June 6, 2010, the RComm Board had approved a proffer for induction of strategic and/or private equity investors for a 26 by means of cent shareholding in the company.
The details of the cash inflow into Reliance Communications and the proportion-exchange ratios for Reliance Communications shareholders have not been decided to this time.
Upon closing itself, the merged entity will have over 80,000 towers and from hand to hand 1,25,000 tenancies from over 10 telecom operators such like Reliance Communications, Aircel, Etisalat DB Telecom, MTS, Uninor Telecom, Videocon Mobile, Tata Teleservices, Vodafone, S Tel. In etc. the merged entity will have a firm option on additional 75,000 tenancies from principal players.
Based on the developments in the Indian telecom sector, including inhume alia the likely future demand for telecom infrastructure across the nation from 14 players in 2G, and the 9 winners in the fresh auction for 3G and the 8m players in BWA Broadband Wireless Access, the merged existence is expected to derive substantially higher tenancy ratios, apart from gradation benefits and operational synergies.
As already announced on June 6, 2010, the RComm Board has apart in-principle approved a proposal for induction of strategic and/or secluded equity investors for a 26 per cent shareholding in the meeting of friends.