Telecom tower infrastructure firm GTL Infrastructure Ltd has readied its war chest to buy Aircel’s tower business. GTL Infra, which is buying Aircel's tower business at an enterprise valuation of around $1.8 billion (Rs 8,430 crore), is working on a Rs 5,000 crore debt financing with State Bank of India (SBI), said a source close to the development.
This will be in addition to its reserves of Rs 490 crore and internal accruals. Last month, VCCircle reportedthat GTL Infrastructure, Tata-Quippo combine and Bharti Infratel were the frontrunners for Aircel's 12,000 towers. The deal is expected to close in January next year.
When contacted, a spokesperson from GTL Infra declined to comment on the development. Media reports today suggest that GTL Infra will pay Rs 4,000 crore in cash and will assume a debt of Rs 4,500 crore. Aircel had appointed Standard Chartered Bank, Nomura and N M Rothschild for the sale of its tower business. The share price of GTL
Infra was trading at Rs 36.65 today at 3 PM, up by more than 1.25%. The share prices soared by nearly 5% in the morning trade, hitting Rs 38 per share. GTL Infra is part of the Global Group, which is also engaged in other telecom solutions businesses across the world.
For GTL Infra, which has around 10,000 towers as per its website, this will take its portfolio to nearly 22,000 towers, bringing it closer to the Tata-Quippo combine. Earlier this year SREI Group-promoted Quippo Telecom Infrastructure Ltd (QTIL) merged with Tata Tele's tower arm, bringing their combined portfolio to 22,000-25,000. Besides, it will also get Aircel as a customer for its independent tower business. Aircel had also signed on Datacom Solutions, which still has to start operations, in a tower-sharing agreement worth $400 million in September this year. Other clients of Aircel are not known.
GTL Infra may have gone aggressively for this deal as Aircel is the only large tower portfolio firm on the block. This would have been the last opportunity for the firm to significantly increase its portfolio through the inorganic route. American Tower Corporation (ATC), which was also in race for Aircel's tower business, is reportedly close to
acquiring 4,000 tower strong Essar Telecom Infrastructure. Several smaller tower firms like Aster Infrastructure, TVS Interconnect Systems and Independent Mobile Infrastructure were also reportedly put on block this year.
For Aircel, the deal will help fund $5-billion capital expenditure plan over the next three to five years. Aircel was bought over by Malaysia’s Maxis Telecom for $1.08 billion in 2005. The Reddy family of Apollo Hospitals Group of India holds 26% in Aircel through its entity Sindya Securities & Investments Private Limited.
Post this deal, Tata-Quippo and GTL Infra are likely to appear as two major independent passive infrastructure players. They would compete with operator backed companies like Indus Towers (a three-way joint venture between Bharti Airtel, Vodafone Essar and Idea Cellular), Reliance Infratel and Bharti Infratel. All these players are looking to sign on new players like Shyam Sistema and Uninor, who have recently entered the Indian market.