GTL to buy Aircel's 17,500 towers for Rs8,400 crore

Besides these 17,500 towers, Aircel has also committed additional 20,000 tower sites to GTL Infrastructure over the next three years

Telecom tower company GTL Infrastructure Ltd said on Thursday that it will acquire 17,500 telecom towers of mobile service provider Aircel Ltd for about Rs8,400 crore.

GTL's group company GTL Infrastructure's board of directors at their meeting held today approved the purchase of tower assets from Aircel and its group subsidiaries through a special purpose vehicle (SPV), GTL said in a filing to the Bombay Stock Exchange.

"The SPV has entered into a business transfer agreement with Aircel for acquiring the said tower portfolio," the company said.

Aircel has committed an additional 20,000 tower sites to GTL Infrastructure over the next three years, it added. The transaction is likely to result in a significantly higher revenue opportunity for GTL Infrastructure in the range of Rs8,500-Rs17,000 crore over the next five years.

Of the total equity funding of Rs3,400 crore for the buyout, GTL Infrastructure would contribute up to Rs1,750 crore, while GTL would invest Rs1,500 crore in the SPV.

Commenting on the deal, Maulik Patel, head-research, Kisan Ratilal (KR) Choksey Shares and Securities Pvt Ltd, said, "For 100% stake GTL Infra will be required to pay about Rs8,500 crore and it will stretch its balance sheet. We expect GTL to dilute their equity base by about 40%-50% and acquisition to be funded (at a) debt/equity ratio of 2.5x."

With this acquisition, GTL will have more than 31,000 towers and will become one of the largest independent telecom tower providers in the country.

GTL offers its expertise in wireless communications from 2G networks to 3G and 4G, from WiMAX to IPTV.

It has a network of over 23,700 towers and with this acquisition, it is slated to be one of the largest telecom infrastructure providers in the country.

GTL had earlier said that it was planning to erect, engineer and manage 1,00,000 cell sites across 150 networks, enabling mobile connectivity to over 100 million subscribers in 50 countries.

Aircel, a unit of Malaysia's Maxis Communication, has about 38,000 towers, of which nearly 17,000 are owned by the company. Maxis Communications holds 74% stake in Chennai-based Aircel.

With the acquisition, GTL Infrastructure would reap more benefit as mobile operators are leasing out tower infrastructure instead of setting them up themselves to control costs.

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    Small car from Bajaj to be smaller than Maruti's Alto: Renault

    The small car being developed by Bajaj Auto and marketed by the Renault-Nissan alliance in India will be smaller than Maruti Suzuki's Alto

    The small car being developed by Bajaj Auto Ltd, that will be marketed by the Renault-Nissan alliance in India, will be smaller than Maruti Suzuki's Alto, according to the French car maker.

    "The car that we are discussing with Bajaj is smaller than the small car. A small car like Maruti Suzuki's Alto or a 1.2-litre car is not on the table for discussion of Renault Bajaj. We are discussing a smaller car than the small car," Renault Asia Africa management committee executive vice president Katsumi Nakamura told PTI.

    Last year, Renault chairman and chief executive Carlos Ghosn had announced that the Renault-Nissan combine along with Bajaj Auto have finalised an ultra low-cost product that will be launched by 2012, a year behind schedule than originally planned.

    Mr Ghosn had stated that design, engineering, sourcing and manufacturing will be handled by Bajaj Auto, while marketing and selling will be looked after by the Renault-Nissan alliance. More importantly, the car will have no Bajaj brand on it.

    Subsequently, Bajaj Auto managing director Rajiv Bajaj had made it public that the small car will have 70%-80% of the parts common with its two- and three-wheelers.

    The small car, initially supposed to hit the market by 2011, was delayed by a year due to differences between the partners over pricing and design.

    Initially, when the project was announced in 2007, Renault wanted the car to compete with Tata's Nano but Bajaj wanted to focus on delivering fuel economy.

    In 2008, Nissan joined the project and a tripartite joint venture was formed with Bajaj holding 50% stake and Renault and Nissan having 25% each and envisaging to produce 400,000 units of the small car annually.

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    Wealth Creators 1999-2009
    The after-effects of the massive boom in engineering, real estate and raw materials of 2003-07 and, of course, massive speculation, continue to be reflected in the wealth-creators’ list. Pratibha Kamath and Sanket Dhanorkar pick the toppers 
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