India's Reliance Seeks $1 Billion from Tower Sale

­India's Reliance Communications has outlined plans for a US$1 billion floatation of its tower operating division, Reliance Infratel within the next few months. The company will be offering ten percent of its equity to investors, giving the whole unit a valuation of around US$10 billion.

Reliance Infratel, a subsidiary of Reliance Communications, is a passive infrastructure company offering plug-n-play facilities to provide mobile services across over 24,000 towns and over 600,000 Indian villages.

The draft paperwork has been filed with the Securities and Exchange Board of India (SEBI), and the approval process for the listing typically takes around three months. The revenues from the floatation are proposed to be utilized for repayment of loans, general corporate purposes including meeting capital expenditure, working capital requirements, strategic initiatives, partnerships, joint ventures and acquisitions.

The Equity Shares of Reliance Infratel are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India.

Last month, Reliance Infratel signed a network infrastructure management contract with new-entrant, S Tel. The agreement is for six circles - Orissa, Bihar, Himachal Pradesh, North East, Assam and J&K and covers telecom towers, transmission for BTS sites and fibre backbone for intercity connectivity

The company did plan a floatation last year, but that was later cancelled.

Posted to the site on 27th September 2009