Reliance Industries has signed a “non-binding term sheet” with Brookfield Infrastructure Group, in which it is written that in exchange of all the tower assets of RCOM Limited, the latter would pay a sum total of Rs 11,000 crore. Reliance will continue to use those towers but then would pay monthly lease for using them.
Reliance Communication Limited (RCOM Limited) in a company statement on Friday this week stated that they are going to sell their tower assets to Brookfield Infrastructure Group for a sum of 11 thousand crore rupees. The amusing thing here is that Reliance would still continue to use those towers but now would pay lease for using them, the same way as a tenant pays rent for using a property.
The snippet from the statement about the deal reads as, “Reliance Communications (RCOM) today announced the signing of a non-binding Term Sheet with Brookfield Infrastructure Group in relation to the proposed acquisition of RCOM’s nationwide tower assets and related infrastructure by Brookfield, RCOM will also enjoy 49 per cent future economic upside from the towers business, based on certain conditions,”
If you don’t know then let me tell you, Brookfield is a renowned infrastructure assets management company having its operations in our nation.
According to the sources this deal is going to bring in the largest ever Foreign Direct Investment (FDI) into India’s infrastructure industry. FDI is good for an economy’s growth and surely it will increase the national GDP (Gross Domestic Product) too.
The statement also read, “RCOM and Brookfield expect considerable growth in tenancies based on increasing 4G offerings by all telecom operators, and the fast accelerating trends in data consumption, which are expected to contribute to significant growth in revenues and profitability for the towers business in the future,”
The deal is said to be done due to over debts over Reliance Communications (RCOM) that would now be cut off after this deal happens. The snippet from the statement justifying this reads as, “RCOM intends to utilize the proceeds of the proposed transaction solely to reduce its debt.”