Reliance Communications' Rs 11,000-crore tower deal with Brookfield collapses

NEW DELHI: Reliance Communications (RCom's) Rs 11,000-crore tower deal with Canada's Brookfield has collapsed, company director Puneet Garg said on Wednesday. The setback comes at a time when lenders to the company are trying to sell assets in a piece-meal fashion to recover their dues, nearly a month after the telco's merger deal with Aircel had fallen through.

After it entered strategic debt restructuring (SDR), RCom gave 51% equity (valued by the company at Rs 7,100 crore) to bankers in lieu of its outstanding debt of Rs 47,000 crore. The process of sale of RCom's assets is now being conducted by the bankers' consortium led by SBI. Asked about the Brook field deal, which had looked at sale of 51% of the equity in the tower business, Garg told TOI, “The originally envisaged deal (with Brookfield) is over.“

Talks about the failure of the tower deal had surfaced after fall of the Aircel merger. With its collapse, the tenancy of the towers was impacted in a big way as questions about the survival of RCom and Aircel came to the fore. The bankers are now understood to be looking at a complete (100%) sale of the company's tower and fibre assets to make it an attractive option for any potential buyer.

It is believed that bankers have now received expression of interest for the tower and fibre business from a clutch of companies which include telecom infra providers such as Bharti Infratel, Indus, ATC and even Brookfield. Apart from these, others who are understood to have shown interest are Reliance Jio, Russia's Sistema and PE players like TPG Capital, Gateway Partners, Carlyle Group and Isquared Capital.

An independent verification could not be made in view of late-night developments. RCom's Garg refused to comment on the matter.

RCom's troubles seem far from over despite firefighting measures being initiated by the lenders. The debt-laden company will be shutting down its 2G and 3G wireless operations by month-end.

The efforts to sell towers and fibre come at a time when bankers are also looking to sell RCom's non-wireless assets that comprise subsea cable, data centres, and enterprise operations.These have also received interest from a handful of Indian and overseas companies. Other assets of the company which are being put up for clearing debt include spectrum and real-estate holdings. The company is looking at deals to sell its landbank in Delhi and Navi Mumbai.