Carlyle, TPG In Talks To Buy Reliance Phone Tower Assets

Mumbai, Andhra Pradesh India (PressExposure) June 14, 2011 -- TPG Capital and Carlyle Group are among companies in talks about purchasing a stake in Reliance Communications Ltd.'s mobile-phone towers unit, said three people with knowledge of the matter.

Reliance Communications, India's second-largest mobile phone operator, also has received interest from potential investors including Blackstone Group LP, the world's biggest private equity firm, and London-based Apax Partners LLP, said one of the people, who declined to be identified because the discussions are private.

"Formal indicative offers from several interested parties" for Reliance's Infratel unit were received, the Mumbai-based company said in a statement to the Bombay Stock Exchange on May 31, without naming any bidders. The mobile-phone operator's board approved taking the sale process to the next stage of due diligence, according to the release.

"If Reliance Communications does sell its tower business, then it will have a positive impact on the company's profitability," said G.V. Giri, a Mumbai-based analyst with IIFL Capital Ltd. who has a 'reduce' rating on the stock. "The tower business will pass into a neutral ownership from an operator-owned business and it will be capable of attracting more tenancy." Reliance Communications, billionaire Anil Ambani's flagship company, has been trying to sell the unit for about a year as it seeks to reduce debt. The company said in June 2010 it was in "advanced talks" to sell about 50,000 telephone towers.

Gaurav Wahi, a spokesman for Reliance Communications in Mumbai, didn't immediately respond to a call seeking comment. Blackstone said in an e-mailed response that it doesn't comment on industry speculation. Dorothy Lee, a spokeswoman for Carlyle in Hong Kong, and Ben Harding, a spokesman for Apax in London, declined to comment. Tim Payne, an external spokesman for TPG, couldn't immediately be reached for comment.

Majority Stake

Reliance Communications may sell a majority stake in the unit, the people said. The company scrapped a deal in August to sell the business to GTL Infrastructure Ltd. Cash from the sale of assets may help replenish Reliance Communications' finances after the company said March 9 that it will save 5 billion rupees ($112 million) by borrowing 87 billion rupees from a group of lenders led by China Development Banking Corp. to refinance the purchase of third-generation airwaves and buy equipment.

Reliance's debt exceeded cash and equivalents by 320 billion rupees at the end of March compared with 199 billion rupees a year earlier, according to the phone operator.

About Rcom

Reliance - Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by Shri Dhirubhai H Ambani (1932-2002), ranks among India's top three private sector business houses in terms of net worth. The group has business interests that range from telecommunications (Reliance Communications Limited) to financial services (Reliance Capital Ltd) and the generation and distribution of power (Reliance Infrastructure Limited).

Reliance - ADA Group's flagship company, Reliance Communications, is India's largest private sector information and communications company, with over 100 million subscribers. It has established a pan-India, high-capacity, integrated (wireless and wireline), convergent (voice, data and video) digital network, to offer services spanning the entire infocomm value chain.

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Press Release Submitted On: June 14, 2011 at 4:35 am
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