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Exclusive: American Tower Corp looks at Alternatives for its Indian Unit

ATC has re-engaged with Brookfield, Stonepeak Partners, Macquarie and KKR & Co.

ATC has again partnered with Canadian company Brookfield, which is considering an outright acquisition and is in separate discussions with US infrastructure fund Stone Peak Partners. He has also joined Macquarie and KKR & That through his advisers, although talks with the latter two have been lukewarm.

HIGHLIGHTS

  • ATC is rumored to be willing to sell a majority interest or maybe all of its holdings and leave the country.
  • Despite having no presence in India and $55 billion in assets under management, Stonepeak is a shareholder in ATC’s US data center company.
  • The telecom towers purchased from Reliance Jio are housed at Summit Digitel, which is already owned by Brookfield.

After failing to find any purchasers for a 50% share in its fully owned Indian subsidiary, ATC Telecom Infrastructure Pvt Ltd (ATC TIPL), American Tower Corp (ATC) is apparently considering selling the business. According to reports, the tower firm is willing to sell a majority interest or possibly its entire ownership and leave the nation.

ATC has reportedly reconnected with Canadian company Brookfield, which is considering a full takeover and has had separate negotiations with US infrastructure firm Stone peak Partners, according to a story from ET. Through its advisers, it has also contacted Macquarie and KKR & Co, but negotiations with the latter two are thought to have been chilly.

Despite having no presence in India and $55 billion in assets under management, Stone Peak is an investor in ATC’s US data center company. Additionally, it has supported projects involving wireless infrastructure, including Vertical Bridge and Globe Telecom Towers in the Philippines. It’s unclear at this time if Stone Peak is aiming for majority ownership or a full 100% takeover.

The telecom towers purchased from Reliance Jio are housed at Summit Digitel, which is already owned by Brookfield. Although pricing continue to be a sticking point, the corporation is thought to be interested in acquiring ATC TIPL in its entirety.

Read More – ATC Warns Vi Payment Shortfalls May Affect India Unit’s Financial Results

Due in major part to its robust portfolio of India tower assets, which included 76,826 towers as of December 2022, ATC is seeking an enterprise value for its Indian subsidiary of over $4 billion. However, prospective bidders are haggling for a $2.8–3.0 billion valuations since they are unwilling to pay any control premium. Given Vodafone Idea’s (Vi), ATC’s largest customer in India, ongoing financial difficulties, they are allegedly concerned about the durability of the tenancy income streams in the future.

ATC originally intended to sell a 50% share in its Indian division, which would have meant joint control with a prospective equal partner. However, the firm has had to quickly alter its approach due to the lack of buyer interest.

One of the sources cited in the initial report claims that “ATC is unwilling to price its India towers below $50,000 apiece, while a potential buyer like Brookfield isn’t convinced if it can recover its money from those towers via steady tenancy revenues amid key customer Vi’s grim financials.” Discussions are reportedly at a standstill over values since a potential buyer would incur additional fees for any mass acquisition of tower assets without a guarantee of long-term leasing revenue.

At a time when India’s telecom sector is significantly consolidating, ATC is looking at its alternatives for its Indian operation. Potential purchasers are expected to approach the discussions cautiously given Vodafone Idea’s continued financial difficulties and the heightened competition from Reliance Jio and Bharti Airtel. However, ATC’s robust portfolio of tower assets may continue to draw buyers, and a successful sale might raise much-needed capital for the tower company’s future growth.

What do you think?

Written by Shallu Srivastav

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