The new entity will own 163,000 telecom towers across India and will become the world’s second-largest tower company
India’s Indus Towers and Bharti Infratel agreed to merge their operations in a deal that will create the world’s second-largest mobile towers company
The new company will have 163,000 towers across 22 telecom service areas in India. The entity will have an estimated equity value of $14.6 billion. The world’s largest tower company is China Tower, a joint venture established by China Mobile, China Unicom and China Telecom.
“The combined company, which will fully own the respective businesses of Bharti Infratel and Indus Towers, will change its name to Indus Towers Limited and will continue to be listed on Indian Stock Exchanges,” Bharti Group said in a statement.
The new firm will own 100% of Indus Towers. Indus Towers is currently owned by Bharti Infratel (42%), Vodafone (42%), Idea Group (11.15%) and Providence Equity Partners (4.85%).
After the deal is closed, Bharti Airtel and Vodafone will jointly control the combined company. Bharti Group said the transaction is expected to close before the end of this year. Bharti Airtel also said that it it would have talks with potential investors for the potential sale of its future stake in the new company.
Under the terms of the deal, Idea has the option to sell its current 11.15% stake in Indus for cash or it can retain a 7.1% stake in the combined tower firm. Providence Equity Partners also has the option to sell part of its stake or retain 3.1% in the new company.
Brazil’s BTC secures financing to expand telecom towers portfolio
In related news, Brazilian independent tower company Brazil Tower Company (BTC) has closed on $79 million of a $104 million long-term debt financing, which it plans to use to boost its tower portfolio.
BTC said it expects to close on the remaining $25 million of financing during the third quarter of this year. BTC’s latest funding round was led by Canada-based Cordiant Capital.
The company currently operates nearly 600 telecom towers for major operators in Brazil including Telefonica, TIM and Claro.
“We are very excited about the growth we are realizing in Brazil through new tower development and new collocations and amendments. Our backlog of new towers and pipeline for growth is the strongest we have seen since 2015,” said Tom Staz, BTC’s chief financial officer.”With the support of our new debt facility and a large inventory of customer orders, we will continue to strategically rollout new tower sites over the next 18-24 months to double the size of our tower portfolio and triple the cash flows of the business.”
“The market is at an inflection point in its development, and we expect to see continued investment and growth for telecom operators and neutral host infrastructure,” said Jonathan Loiacono, an investment banking adviser who works with Cordiant. “With the proliferation of smartphones and over-the-top services, network operators are expanding and densifying their networks rapidly to keep pace with burgeoning growth in data demand. Additionally, the positive zoning regime, low fixed broadband penetration and national coverage requirements present a very strong investment case for credit and equity investors,” Loiacono added.
