India-based Mukesh Ambani's Reliance Industries (RIL) telecom arm Infotel Broadband, may buy a stake in Reliance Infratel, a company belonging to Anil Ambani, in a deal that also includes leasing as many as 50,000 towers, reports The Economic Times. Two people close to the ongoing negotiations said the deal had two components. One part is a leasing arrangement valued at INR 85-100 billion over a ten-year period. One of the people said a part of the lease amount will be paid up front. If the lease deal is a success, it will enable RIL to use nearly 50,000 towers of Reliance Infratel. The second component of the deal being negotiated between the two Reliance groups consists of RIL's Infotel Broadband buying 15-25 percent in Reliance Infratel.
The stake sale is being negotiated at an enterprise value of USD 3.5-4 billion for the company. The valuation would mean cash inflow of INR 28.5-53 billion for RCom, all of which will be used to retire debt. The two sides had not reached a final agreement, the people close to the deal cautioned. One of the two said a contract could be inked in February. RCom CEO of wireless business said that the company is in negotiations with three telecommunication operators for tower-leasing deals. One of the persons close to the deal said Infratel is planning a public listing towards the end of this year to offload a 25 percent stake. Through the issue, Infotel Broadband will dilute its stake to 5-10 percent, leaving 55 percent with RCom and the rest with investors, which currently hold 5 percent.
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