The Competition Commission of India (CCI) said on Monday that it has approved the divestment of Reliance Jio Infocomm Ltd’s telecom tower assets to Canada’s Brookfield Infrastructure Partners Lp and other investors.
The anti-trust regulator’s approval comes more than a month after Reliance Industries Ltd, the parent company of India’s only profitable telecom operator Reliance Jio, said it had signed a binding pact with asset management firm Brookfield for an investment of ₹25,215 crore in its tower arm.
The deal is in line with Reliance’s overall objective to reduce debt in its high-capex telecom business and increase focus on building digital services. Under the agreement, RIL’s wholly-owned subsidiary Reliance Industrial Investments and Holdings Ltd (RIIHL) has entered into binding agreements with Brookfield Infrastructure Partners Lp and its institutional partners, for an investment of ₹25,215 crore in the units to be issued by the Tower Infrastructure Trust.
The partners of Brookfield are British Columbia Investment Management Corporation, GIC Infra Holdings Pte Ltd’s subsidiaries Anahera Investment Pte Ltd and Valkyrie Investment Pte Ltd. Tower Infrastructure Trust, an Infrastructure Investment Trusts (InvIT), currently holds 51% of the outstanding equity share capital of Reliance Jio Infratel Pvt. Ltd. The current sponsor of the InvIT is RIIHL.
Jio will be the anchor tenant of the tower portfolio under a 30-year master services agreement.
The tower stake deal is significant as it will give more firepower to Jio in the telecom battlefield at a time when its loss-making rivals Bharti Airtel and Vodafone Idea still await government clearances for the merger of Indus Towers and Bharti Infratel.
Reliance had in July announced that it was in talks with Brookfield and the transaction closure was subject to completion of due diligence, documentation and requisite statutory and regulatory approvals. This is the single largest foreign investment in an Indian infrastructure vehicle, the company had said in July.
Ahead of the announcement, tower and fiber passive infrastructure assets of about ₹1.25 trillion were demerged from Reliance Jio in March 2019 to InvITs.
The fibre and tower businesses, Jio Digital Fibre Pvt. Ltd and Reliance Jio Infratel Pvt. Ltd, respectively—operate as independent entities.
Reliance Jio lnfratel has 130,000 communication towers in its portfolio, which it plans to grow to 175,000.
