Shareholders of Reliance Infratel approve scheme of demerger of tower business to Brookfield Infrastructure Group
The shareholders of Reliance Infratel (RITL), a subsidiary of Reliance Communications (RCOM)at their meeting convened on 29 April 2017 pursuant to the order of the National Company Law Tribunal (NCLT), have approved with 98% majority the Scheme of Arrangement for demerger of the Tower division of the RITL into Towercom Infrastructure (TIPL).Upon the completion of the demerger, through a Scheme of Arrangement, and the completion of certain other conditions and approvals, Rapid Holdings 2, a company which is a part of the Brookfield Infrastructure Group will acquire 100% of TIPL and thereby creating the second largest independent and operator-neutral Towers company in India.
The Shareholders of TIPL, a subsidiary of the Company, have also approved the said Scheme at their meeting held on 29 April, 2017, convened under the order of the NCLT.
The Company has already received approval from Competition Commission of India for the proposed Scheme of Arrangement.
The Company's telecom towers demerged into TIPL will be 100% owned and independently managed by Brookfield Infrastructure.
Upon the Scheme becoming effective, RCOM will receive an upfront cash payment of Rs.11,000 crore (US$ 1.7 billion), which will be solely used to reduce its debt. The already announced 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 (US$ 4.8 billion), or nearly 70% of existing debt.
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