Tata-Tele backs Viom confirms RCom towers interest
A number of strategic and private equity investors have expressed their interest for a majority stake in Anil Ambani-controlled Reliance Communications tower business.
- (1888PressRelease) June 17, 2011 - Viom Networks, a telecom tower JV between Tata Teleservices and the Kanoria Family, who are founders of SREI Infrastructure , confirmed its interest for Reliance Infratel's tower assets to ET NOW.
Hemant Kanoria, Chairman & Managing Director, Viom Networks said, "We are definitely interested in Reliance Infratel's towers but haven't begun any due diligence on the company so far".
Other bidders who have expressed interest to buy a stake in Reliance Infratel include American Tower Corporation and UAE's largest telecommunications provider Etisalat, atleast four people with knowledge of the talks said on condition of anonymity.
UBS is advising Reliance Communications on the sale of its tower business and has also approached a number of private equity funds including Carlyle and Apax Partners. While Carlyle has submitted an independent bid, Apax Partners may back Viom's bid for the tower assets, atleast two people said.
A spokersperson for Reliance Communications could not be reached for comment. American Tower Corporation declined to comment for this story.
A spokersperson for Etisalat said in a detailed email response to queries from ET NOW, 'At this time we are not considering an acquisition of Reliance Infratel. There are no discussions between our management teams and Infratel'.
A banker familiar with the sale process said the talks are at a preliminary stage and prospective bidders may not be able to match the valuation expectations of the seller. 'There could be many combinations that could emerge as the sale process progresses with private equity funds backing strategic investors like American Tower Corporation, but Reliance Communications is expecting a valuation of $5 bn for the towers, which is on the higer side' the banker said.
One of the concerns for the prospective bidders is that the tower subsidiary depends almost entirely on Reliance Communications for its revenues and hence has a captive tenant profile which could make it difficult to turnaround the business.
Reliance Communications has been looking to divest its tower business in a bid to reduce net debt, which stood at more than $7 billion as of March'2011.
Late last year GTL Infrastructure pulled out of a potential $9 billion deal to buy 50,000 towers of Reliance Infratel due to differences on valuation.
http://economictimes.indiatimes.com/news/news-by-industry/telecom/tata-tele-backs-viom-confirms-rcom-towers-interest/articleshow/8787863.cms
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