Brookfield Asset Management is pursuing India’s largest-ever infrastructure deal with the acquisition of Reliance Industries Limited’s telecom tower portfolio for $3.6 billion, a statement from RIL said.
The investment will be made through the fund manager’s flagship global vehicle, Brookfield Infrastructure Fund IV, which is targeting $17 billion, a source with direct knowledge of the situation said.
An RIL spokesman told Infrastructure Investor the portfolio included 175,000 telecom towers that were either operational or under development. The spokesman said the assets were subject to a “perpetual” agreement with Reliance Jio, a mobile network operator that is part of the RIL conglomerate, but declined to provide more details.
The transaction will be conducted through the Tower Infrastructure Trust, sponsored by one of RIL’s subsidiaries. The infrastructure investment trust already holds a 51 percent stake in Reliance Jio Infratel (RJIPL), the portfolio owner.
In a statement, RIL said Brookfield would acquire the units issued by the trust for $3.6 billion, with the proceeds used to repay RJIPL’s existing liabilities and acquire RIL’s remaining 49 percent equity share.
The RIL spokesman confirmed the conglomerate was also aiming to monetise its fibre-optic portfolio using a similar structure, but declined to provide more details. The spokesman said Brookfield could be “a candidate” for investing in the assets, but declined to name any other potential investors.
Last March, Reliance Jio Infocomm spun off its fibre-optic and telecom-tower portfolios to two newly created companies controlled by two different infrastructure trusts, according to documents from the company.
Brookfield had negotiated to acquire a 49 percent stake in RIL’s telecom tower business in 2016 for $1.6 billion. That deal was conditional on a merger between Reliance Communication and Indian mobile network operator Aircel, and it was scrapped after the merger failed.
With this transaction, Brookfield underlines its confidence in the Indian market. The transaction comes four months after the Toronto-based firm paid $1.9 billion to acquire a 1,500km natural gas pipeline in the country, also owned by RIL. The asset connects natural gas reserves off India’s east coast with some of the fastest-growing cities in the western part of the country.
Brookfield declined to comment for this story.