GIC, co-investors buy Reliance's India telecom towers for US$3.4b

SINGAPORE sovereign wealth fund GIC's affiliates, Canada's Brookfield Infrastructure Partners and other institutional co-investors have bought the entire stake in a telecommunications tower company in India.

They acquired the company from Reliance Industrial Investments and Holdings, a wholly-owned subsidiary of Indian billionaire Mukesh Ambani-controlled conglomerate Reliance Industries.

The total equity commitment for the transaction is about US$3.4 billion, GIC announced in a press statement on Tuesday, without stating the size of its stake or how much it is investing.

Of the US$3.4 billion amount, Brookfield Infrastructure will invest US$600 million, the New York and Canada-listed firm said in a separate press statement on Monday. It is the flagship infrastructure company of Toronto-based Brookfield Asset Management.

The investment comprises a portfolio of around 135,000 towers forming Reliance Jio Infocomm's telecommunication network.

More towers are planned, which will increase the total number of towers in the transaction perimeter to about 175,000 in the "near term", Brookfield said in its statement.

GIC noted that this will build a robust telecommunications market within India.

Jio is the anchor tenant of the portfolio under a 30-year master services agreement, providing the tower company with a secure and long-term source of revenue, GIC added.

The deal was first signed last December and had been pending regulatory approval. Reuters reported that Reliance has since been selling stakes in its digital unit to bluechip companies, raising billions of dollars, to cut debt.

Ang Eng Seng, GIC's chief investment officer for infrastructure, on Tuesday said the portfolio offers "resilient income and long-term value given India's attractive data demand growth outlook as 4G and smartphone penetration is still very low".

"While we remain cautious in this period of high uncertainty, we continue to seek good, long-term opportunities in India," Mr Ang said.

Brookfield said that the portfolio provides a "well-placed" platform to capitalise on the rollout of 5G across the country, as the towers are largely connected by fibre backhaul.

The acquisition significantly expands and diversifies Brookfield's data-infrastructure segment.

The company is confident in the long-term prospects for data-sector growth in the South Asian nation, according to Anuj Ranjan, managing partner and head of India and the Middle East for Brookfield.

"The recent investments by leading global technology companies and private equity investors in Jio is further testimony to the platform Reliance has built and their strength as our anchor tenant," Mr Ranjan said.

Brookfield Infrastructure owns and operates long-life assets in the utilities, transport, energy and data infrastructure sectors across North and South America, the Asia-Pacific and Europe.