Sanjiv Ahuja’s TGH, TPG Asia sign pact to buy RCom tower business

Tillman Global Holdings LLC, founded by telecom veteran Sanjiv Ahuja, and TPG Asia Inc have signed a non-binding pact to buy the mobile phone tower business of Reliance Communications Ltd (RCom) of the Anil Ambani group in one of the largest deals in the telecom sector.

While RCom did not disclose the financial details of the deal, market estimates have put the enterprise value of the deal at around Rs 23,000 crore. The company which has 45,000 towers across India, plans to use the proceeds to cut net debt by 75 per cent from over Rs 38,000 crore. The tower business will be transferred from its subsidiary Reliance Infratel Ltd into a separate special unit that will be fully owned by the two private equity firms. Carlyle and American Tower Co (ATC) were also in the race for the RCom tower unit, but they backed out later. Tillman Global Holdings is a US-based holding company which invests in and creates telecom and energy infrastructure businesses focused on developed and emerging markets. Ahuja was earlier the CEO of Orange SA, one of the largest cellular operators in the world.

RCom shares, however, fell 3.11 per cent to Rs 81.05 on the BSE on Friday. “The parties have entered into an exclusivity agreement valid till January 15, 2016. The proposed transaction is subject to final due diligence, definitive documentation, applicable regulatory and other approvals and certain other terms and conditions. Accordingly, there can be no certainty that a transaction will result,” RCom said.

RCom said it has signed “a non-binding term sheet with Tillman Global Holdings, LLC and TPG Asia, Inc in relation to the proposed acquisition of RCom’s nationwide tower assets and related infrastructure by Tillman and TPG.” Under the term sheet, the assets will be transferred from Reliance Infratel Ltd on a going concern basis into a separate SPV, to be owned 100 per cent by Tillman and TPG. “RCom will continue as an anchor tenant on the tower assets, under a long term MSA, for its integrated telecom business. RCom intends to utilise the proceeds of the proposed transaction only to reduce its debt,” it said.