GIC and Brookfield Invest Big-Time in Indian Telecom Towers

Posted on 09/01/2020

Singapore’s GIC Private Limited and Brookfield Infrastructure Partners L.P., and other co-investors, have acquired a 100% stake in a telecom tower company in India from Reliance Industrial Investments and Holdings Limited, a wholly-owned subsidiary of Reliance Industries Limited. The total equity commitment for the transaction is approximately US$ 3.4 billion (Rs 25,200 crore). GIC is getting exposure to Indian telecommunication tower assets. Brookfield invested US$ 600 million in the deal. The deal was signed in December 2019. Other co-investors in the deal include British Columbia Investment Management Corporation (BCI).

According to the press release, “the investment comprises a portfolio of around 135,000 communication towers which forms Reliance Jio Infocomm Limited’s (Jio) telecommunication network. The towers were recently constructed and strategically located for cellular network coverage across India. More towers are planned, increasing the total number of towers in the transaction perimeter to approximately 175,000, building a robust telecommunications market within the country. Jio is the anchor tenant of the tower portfolio under a 30-year Master Services Agreement, which will provide the tower company with a secure, long-term source of revenues.”

Jio is the anchor tenant of the tower portfolio under a 30-year Master Services Agreement.

Per deal terms, Reliance Industrial Investments & Holdings Limited is the sponsor of Tower Infrastructure Trust. The trust will issue units in the trust to Brookfield affiliate BIF IV Jarvis India and co-investors, including GIC. India’s Department of Telecommunications approved the deal, which is subject to three conditions. The conditions include that foreign investors will not get an assured return on their exit; compliance with pricing guidelines, documentation, and reporting requirement of the Reserve Bank of India, and compliance with other applicable laws.

Brookfield Financing

In August, Brookfield Infrastructure agreed to sell $500 million aggregate principal amount of medium-term notes, Series 8, due September 1, 2032, which will bear interest at a rate of 2.855% per annum, payable semi-annually. The Notes are being offered through a syndicate of agents led by RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., HSBC Securities (Canada) Inc., National Bank Financial Inc., and TD Securities Inc.

Keywords: Brookfield Asset Management.

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