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RCom looking towards full exit from tower unit

Indian operator Reliance Communications (RCom) is in the final stages of selling off its tower business, with the bidding down to 4 companies.

RCom’s initial plan was to divest a 51% stake in its tower unit, Reliance Infratel. However, it has previously stated that it would prefer to sell the entire company, and 2 of the 4 bidders are interested in a full acquisition of RCOM’s 96% holding. The final 4% is held between other parties.

It is unclear which of the 4 bidders – which comprise of infrastructure firm American Tower Corp along with investment groups Carlyle, Farallon Capital and Tillman Capital – are after the full stake, and which are aiming to acquire a 51% majority.

However, RCom is widely expected to divest its entire stake in order to lower its debt, despite the fact that this may result in the unit receiving a lower market valuation. In June, RCom’s debt was placed at around INR386 billion ($5.91 billion).

Reliance Infratel has a value of between INR220 billion and INR240 billion, although it also has INR80 billion in debt. It is India’s third biggest tower firm, with around 45,000 towers along with the country’s largest fibre network.

Final bids will be accepted following the completion of due diligence, which is expected to be by the first week of October. The deal is likely to close around the 20th of October.

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