TPG, Farallon linked to GTL Infrastructure acquisition

GTL Infrastructure could be valued at as much as INR105 billion ($2.2 billion) but the market might decide this is on the expensive side. GTL Infrastructure is already working on an INR100 billion debt restructuring deal with creditors such as SBI, ICICI Bank, Union Bank, Canara Bank and IOB. It is carrying a total of INR120 billion in debt.

India's telecom operators are being squeezed by low call prices and high operational costs in what is already a highly competitive market. Consolidation is seen as essential to the continued sustainability of the capital intensive telecom tower business.

Yesterday it was reported that Blackstone Group and The Carlyle Group have jointly expressed interest in bidding for up to 95% of Reliance Infratel, although they could face competition from a consortium comprising Apax Partners and Advent International. Bids for the company, which owns more than 50,000 mobile towers, are tipped to value the entire company at $4 billion or more.

Reliance Communications has hired UBS to coordinate the sale of its tower unit. It said in May that several parties had made tentative offers for the asset but none proceeded to the formal stage, largely due to the differences in valuation.

Efforts to spin off Reliance Infratel into a separate publicly listed entity have also failed. In June 2010, Carlyle, Blackstone and TPG were reported to be in talks over the potential spin out of Reliance Infratel. The proposed transaction - which apparently came to nothing - would have seen Reliance's towers packaged with 32,000 from GTL Infrastructure into a special purpose vehicle. Shares would then have been issued to the parent companies and the private equity firms, followed by a public listing.

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• Topics
• Technology
• South Asia
• Buyouts
• TPG Capital
• The Carlyle Group
• The Blackstone Group