American Tower Corporation is set to increase its stake in its India unit by buying shares from Tata Group and IDFC Private Equity for Rs 2,940 crore (about $400 million at current exchange rates).
The New York Stock Exchange-listed company said in a statement that Tata Group has offered to sell half its stake in ATC Telecom Infrastructure Pvt. Ltd while IDFC PE has decided to fully exit.
ATC holds a 63% in the India telecom tower unit while Tata Group owns about 26%. Other shareholders own the remaining stake. ATC said its stake in the India unit will increase to about 79% after the transactions are completed by the end of March 2019.
The telecom tower operator had, in 2015, acquired a 51% stake in what was then known as Viom Networks Ltd for $1.2 billion. Its stake increased to 63% after it merged some of its other India units with Viom, which was later renamed as ATC Telecom Infrastructure.
Separately, ATC said that Tata Teleservices Ltd has agreed to pay a one-time cash payment of around $320 million (Rs 2,367 crore) to the company for a settlement and release of certain contractual obligations.
Tata Teleservices had been a major tenant for ATC Telecom. In October 2017, Tata Group decided to sell its consumer telecom business to Bharti Airtel Ltd. This has now prompted Tata Group to end its lease agreements for telecom towers with ATC.
“We expect that this agreement (with Tata Group), along with the acquisition of approximately 20,000 Vodafone and Idea towers earlier this year, will position American Tower to benefit from the anticipated recovery in the Indian mobile market,” ATC said in the statement.
As on 31 December 2017, ATC Telecom Infrastructure had around 58,034 towers, according to a report by ratings firm ICRA.
In another major deal in the telecom towers segment, tower companies Indus Towers and Bharti Infratel agreed to merge earlier this year. As part of the deal, telecom operators Bharti Airtel, Idea Cellular and Vodafone, along with private equity firm Providence Equity Partners, agreed to merge their respective shareholdings in Indus Towers into Bharti Infratel.