Global investors to buy 5 p.c. equity in RTIL
MUMBAI: Reliance Communications Ltd. (RCom) on Thursday announced that a group of leading international investors across the U.S., Europe and Asia have agreed to buy five per cent of the equity share capital of its 100 per cent owned tower company, Reliance Tower Infrastructure Ltd. (RTIL), for a consideration of Rs. 1,400 crore ($337.5 million).
The capital gains arising out of the stake sale will be about Rs. 1,200 crore ($280 million).
The transaction values RTIL at Rs 27,000 crore ($6.75 billion).
The transaction, according to a company statement, was heavily oversubscribed with a total order in excess of $2 billion. The transaction has resulted in substantial unlocking of value for RCom’s two million plus shareholders. RTIL’s equity valuation of Rs. 27,000 crore translates to about Rs. 135 per RCom’s equity share, which is nearly 25 per cent of RCom’s current market price of Rs. 565 per share.
RCom’s residual 95 per cent stake in RTIL is valued at $6.4 billion (Rs. 26,000 crore) and the company will pursue opportunities for further unlocking of value through an RTIL Initial Public Offering (IPO) and/or strategic sale at an appropriate time.
According to Anil Ambani, Chairman, RCom, “we are excited about the tremendous growth potential in the Indian telecom infrastructure business. Our strategy to create a separate company for infrastructure business has resulted in tremendous unlocking of value for RCom shareholders.