RCom withdraws scheme for sale of tower co to Brookfield

Reliance Communications said it has filed with the National Company Law Tribunal to withdraw its demerger scheme for its tower assets.

The move follows the cancellation of its plans to merge with Aircel Cellular due to regulatory issues.

The company Anil Ambani-led company had said that since the merger with Aircel was cancelled, the deal to demerge its tower company and sell a stake to Brookfield too will have to be reworked.

Since the merger was not going through, the additional incremental tenancies for the towers from Aircel’s network would no longer be coming through, and the valuation of the tower subsidiary will have to be reworked to reflect that, company officials said.

In a statement today, RCom said it expects to reach a new deal on the tower asset sale soon.

“The RITL tower demerger scheme shall, in due course, be taken up for application with the required changes. The company shall issue the relevant notifications at an appropriate future date,” it said.

RCom was to sell Reliance Infratel to Brookfield, but retain some of the economic upside from the company under a deal. Brookfield was to pay RCom upfront cash of Rs 11,000 crore for 51 per cent interest whereas RCom will retain 49 per cent stake in the business, which was to be sold later.

RCom had said that ‘vested interests’ and regulatory hurdles worked to thwart its deal with Aircel. The combined company was supposed to be the fourth pan-India operator, and was supposed to give tough competition to incumbents with a strong spectrum portfolio.