RIL to divest Jio's tower assets to Canada's Brookfield for Rs 25,215 cr; proceeds to be used to repay financial liabilities of RJIPL

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.

Press Trust of India December 16, 2019 14:05:46 IST
RIL to divest Jio's tower assets to Canada's Brookfield for Rs 25,215 cr; proceeds to be used to repay financial liabilities of RJIPL
  • RIL said its unit RIIHL has inked binding agreements with Brookfield Infrastructure Partners LP and its partners for the tower business deal

  • 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

  • RJIPL has a current portfolio of around 130,000 communication towers that forms the infrastructure backbone of Jio telecommunication network and has plans to expand this to 175,000 towers

New Delhi: 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.

Reliance Industries Ltd (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 percent equity of the operating tower company.

RIL to divest Jios tower assets to Canadas Brookfield for Rs 25215 cr proceeds to be used to repay financial liabilities of RJIPL

Representational image. Reuters

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 percent 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 percent 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," Mukesh D Ambani, Chairman and Managing Director of RIL.

"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",  he said.

Closing of the transaction is subject to certain regulatory approvals, which are expected shortly, the statement said.

(Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost)

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