Reliance Infratel To Demerge Its Tower Division For Rs 11,000 Cr


Reliance Infratel, a subsidiary of Reliance Communications (RCom) is likely to demerge its tower division of RITL into Towercom Infrastructure (TIPL) as the company received the shareholder’s approval on the issue. A huge majority of 98 per cent agreed for the merger in a meeting convened on April 29, 2017.

Brookfield Infrastructure Group company will wholly acquire the demerged company TIPL, post the completion of demerger through a merger scheme, Rapi Holdings 2, creating the second largest independent and operator-neutral tower company in India.

The company has already received approval from Competition Commission of India for the proposed Scheme of Arrangement.
The following M&A is likely to take place for a cash payment of Rs 11,000 crore by Brookfield Infrastructure to Rcom, which is to be used for settling substantial debts.

Further, the proceeds from combining Rcom’s wireless business with Aircel and the monetisation of the Tower business is to be used by the company to settle around 31,000 crores of debt, which constitutes 70 per cent of the company’s total debt.           

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