Idea eyes $1.2bn deal to sell towers

MUMBAI (TIP): Idea Cellular, part of the Aditya Birla Group, is working on a Rs 7,580-crore ($1.2 billion) deal to sell its independent towers, drawing the interests of Malaysia’s Axiata, Bharti Infratel and American Tower Corporation (ATC), sources directly briefed on the matter said.

India’s third largest mobile service provider owns and operates about 11,000 towers in the country.

Debt-laden after the expensive spectrum auctions, top domestic telcos have been seeking fresh capital-raising plans and value-unlocking moves.

Idea Cellular, which raised Rs 3,000 crore through a qualified institutional placement process last year, carries a consolidated debt of Rs 14,000 crore in FY15. The country’s largest wireless service provider Bharti Airtel too had divested its African towers assets as part of an ongoing de-leveraging exercise.

A recent Motilal Oswal Securities report said Idea’s net debt to gross operating profit is expected to touch 2.9 in the current fiscal, up from 1.3 in the previous year. Debt worries have weighed down the telecom stock despite the robust business performance. Axiata, which owns a strategic minority stake in Idea Cellular, has eyed the Indian partner’s independent tower arm for some years.

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Bharti Infratel, the listed telecom infrastructure unit of Bharti Airtel that manages over 35,000 towers, is sitting on a cash surplus of more than Rs 7,500 crore and is chasing acquisitions in India and neighbouring markets. Similarly, ATC, which has a smaller footprint in the country with 13,000 odd towers, too is looking at inorganic growth opportunities.

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