Mukesh Ambani's Reliance Industries on Monday said it will divest Jio's telecom tower assets to Canada's Brookfield Infrastructure Partners LP for Rs 25,215 crore.
RIL said its unit, Reliance Industrial Investments and Holdings Ltd (RIIHL) has inked binding agreements with Brookfield Infrastructure Partners LP and its partners for the tower business deal.
Brookfield will buyout 100 per cent equity of the operating tower company.
RIIHL "has entered into binding agreements with Brookfield Infrastructure Partners LP, and its institutional partners, for an investment of Rs 25,215 crore in the units to be issued by the Tower Infrastructure Trust," the company said in a statement.
Under the deal, RIIHL, the sponsor of Tower Infrastructure Trust, would issue units in the trust to Brookfield affiliate BIF IV Jarvis India and some co-investors.
After the deal is closed, the Canadian alternative assets manager, Brookfield and its partners would become sponsors of the trust, holding 100 per cent of India's largest telecom tower company with 130,000 towers through Tower Infrastructure Trust, while the RIL subsidiary would become a co-sponsor, but will hold no units.
This is the single largest foreign investment in an Indian infrastructure vehicle.
Proceeds from the investment by Brookfield and long-term loans will be used to repay existing financial liabilities of Reliance Jio Infratel Pvt Ltd (RJIPL), including loans extended by RIL. It owns Rs 12,000 crore to RIL.
"At the closing of the transaction, the Trust will own 100 per cent of the issued and paid-up equity share capital of Reliance Jio lnfratel Pvt Ltd," the statement said.
RJIPL has a current portfolio of around 130,000 communication towers that forms the infrastructure backbone of Reliance Jio Infocomm Ltd's (Jio) telecommunication network and has plans to expand this to 175,000 towers.
Jio is an anchor tenant of the tower portfolio under a 30-year Master Services Agreement.
"We are pleased to enter into this long and strategic relationship with Brookfield, which is one of the largest and most respected managers of infrastructure assets globally.
"We are confident of Brookfield's abilities to manage this large portfolio of high-quality infrastructure assets and further enhancing value creation opportunities. This transaction demonstrates the belief of global investors in the potential of India's digital opportunity", said Mukesh D Ambani, Chairman and Managing Director of RIL.
Closing of the transaction is subject to certain regulatory approvals, which are expected shortly, the statement said.
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