 "A customer leaves a Reliance communications store in Ahmedabad")
Reliance Communications (RCOM) was trading 9% higher at Rs 38.05 on the BSE after the company announced the signing of binding agreements with Brookfield Infrastructure in relation to the acquisition of RCOM’s nationwide tower assets by affiliates of Brookfield Infrastructure Partners LP.
RCOM will receive an upfront cash payment of Rs 11,000 crore (US$ 1.6 billion) on completion of the transaction. The company will utilize the upfront cash payment solely to reduce its debt, the company said in a press release.
The combination of RCOM’s wireless business with Aircel, and the monetization of the Tower business, will together reduce RCOM’s overall debt by Rs 31,000 crore, or nearly 70% of existing debt, it added.
RCOM and Reliance Jio will continue as major long term tenants of the new Tower company, along with other existing third party telecom operators.
RCOM will continue to hold 50% stake in the wireless business combination with Aircel and the 49% future economic upside in the towers business, and will monetise these valuable assets at an appropriate time in the future to further substantially reduce its overall debt.
The stock hit an intra-day high of Rs 38.50 on the BSE, seen a huge trading volumes. Till 12:41 pm; a combined 35.46 million shares have already changed hands against sub 7 million shares that were trade daily in past two weeks on the BSE and NSE.
