Brookfield to pay $1.6b in Indian cell tower deal

The GP will manage the assets and related infrastructure through a separate special purpose vehicle, according to a filing, with Reliance receiving 49% of the future economic upside based on certain conditions. Reliance will also remain an anchor tenant of the towers.

The company intends to use the proceeds from the transaction to reduce its debt, which it reported to be around INR443 billion in its most recent quarterly earnings. An earlier attempt to sell the towers to TPG Capital and Tillman Global Holdings fell through after the parties could not agree on a valuation.

Reliance's debt load has put a growing strain on the company's balance sheet. The most recent annual report showed revenue of INR103 billion for the year ended March 2016, down from INR111 billion the year before. Over the same period the company's net loss dropped from INR16.3 billion to INR16.2 billion.

Brookfield and Reliance expect demand for tenancies to grow as Indian mobile phone companies increase their 4G data offerings and consumer use of mobile data continues to grow. They also hope to take advantage of consolidation opportunities in India's tower industry.

India's recent rapid pace of development has attracted foreign investor interest in its cellular infrastructure, most notably last year when US-based American Tower Corporation (ATC) bought Viom Networks for INR76 billion. IDFC Alternatives and Macquarie SBI Infrastructure Management made partial exits in the deal, which saw ATC take a 51% stake.

Brookfield recently closed its third global infrastructure fund at $14 billion, following the $4 billion close of its flagship global PE fund and the $9 billion close of its real estate fund. The firm has more than $250 billion in assets under management globally.

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• Topics
• South Asia
• Infrastructure
• Buyouts
• India
• Brookfield Asset Management