Update: GTL Infrastructure informed the exchanges today that its board will meet on Thursday for matters pertaining to "consideration of opportunities for strategic acquisition/ investments. The deal to acquire Aircel's tower business for $1.8 billion, as reported earlier by VCCircle, is expected to be announced tomorrow.
GTL Infra will become the second largest telecom tower firm with a portfolio of around 30,000. Tata-Quippo remains the largest independent passive telecom infrastructure firm with 33,000 towers having tenancy of 2, expected to reach 40,000 by end of the year.
GTL Infrastructure Ltd is set to announce the $1.8-billion (Rs 8,160 crore) buyout of Aircel's tower business this week, possibly as early as on Wednesday. GTL, backed by a $1.2-billion (Rs 5,440 crore) loan from State Bank of India (SBI), has clinched the transaction which is now awaiting formalities, said sources privy to the development.
With this deal, a complete buyout of Aircel's tower business, GTL will become a significant independent player in the shared telecom infrastructure space. GTL took the deal away from rivals Quippo and Bharti Infratel, the other two short-listed bidders, in the last few weeks. Once the deal is announced, Aircel, which is 74% owned by Malaysia's Maxis Communications, will go through the process of de-merging the tower business.
Emails sent to GTL Infrastructure and Aircel spokesersons did not elicit any response till this story was published.
VCCircle had earlier reported on GTL being shortlisted for the Aircel tower buy, and also lining up a line of credit from SBI for the same. Nomura, Standard Chartered and Rothschild were advisors to Aircel on this deal.
GTL has about $110 million in (Rs 500 crore) cash, which makes the impending transaction a substantially leveraged one. The exact cash component of the deal could not be ascertained right now. This will also be among the biggest leveraged acquisition financing by SBI.
With this deal, GTL will not only boast a portfolio of 30,000 towers but also win the fast-expanding Aircel as its key customer. It will also take GTL well past its organic growth target of nearly 24,000 towers by the end of 2014.
Clinching the deal was critical for GTL in its ambition to become the largest independent player in the shared telecom infra (read tower) business. Quippo had raced past it after a merger deal with Tata Tele's tower operations, and international giants in the independent tower play, like American Tower Company, have been turning aggressive with acquisition led growth. Tata-Quippo combine is currently the largest independent telecom tower firm.
Gaining from the deal, Maxis is also likely to put on hold stake sale plans in Aircel. Last year, it had initiated a process of divesting up to 26% stake in Aircel to fuel its $5-billion national expansion plans in the next four years. Australia's Telstra, France Telecom and AT&T were reportedly in the race to buy into the company, which is emerging with a national footprint after being restricted to Tamil Nadu for years. "The tower deal and the recent $3-billion IPO of Maxis in Malaysia gives it enough liquidity for the time being. So, the stake sale in Aircel can be on the backburner," said a banking source who did not wish to be quoted.