TPG, Tillman to buy telecom towers unit from India's Reliance

The assets will be transferred from Reliance into a special purpose vehicle owned by TPG and Tillman, according to a statement. Reliance will continue to lease the towers for use by its telecommunications business. TPG and Tillman are also considering purchasing Reliance's inter-city and intra-city optic fiber assets in a separate and independent transaction.

Reliance will use the proceeds of the transaction to pay down its debt, which it reported in its most recent quarterly earnings to be INR399 billion ($6 billion). The size of the transaction has not been disclosed, but media reports have estimated that the tower sale, along with the possible optic fiber deal, will reduce the company's debt to around INR100 billion.

Reliance has been looking to cut its debt load, which has put a strain on its balance sheet. In its most recent annual report, the company recorded revenues of INR108 billion for the year ended March 2015, down from INR112 billion the year before. Over the same period Reliance's net losses grew from INR7.6 billion to INR16.3 billion.

Asset sales among highly leveraged companies have increased recently, due to the recent adoption by the Reserve Bank of India of the strategic debt restructuring (SDR) scheme. Under the program, banks can convert loans into equity in order to create an ownership stake and force changes in company management.

To avoid a takeover, some companies have chosen to pay off their debt by selling assets; Reliance Infrastructure is one example, having recently sold a 49% stake in its electricity business to Canada Pension Plan Investment Board.

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• Topics
• South Asia
• Infrastructure
• Buyouts
• India
• TPG Capital
• Infrastructure
• buyout
• TMT