American Tower to sell India operations to Brookfield for $2.5bn
US-based telecom tower major American Tower Corporation (ATC) has decided to sell its loss-making Indian branch, ATC India, reports Bloomberg. The buyer is Data Infrastructure Trust (DIT), which is sponsored by an affiliate of Brookfield Asset Management. The deal is subject to government and regulatory approvals and is expected to be finalized in the latter half of 2024, provided all customary closing conditions are met. ATC India constructs telecom sites and provides colocation spaces for India's mobile network operators.
Details of the $2.5 billion transaction
ATC is set to receive an estimated $2.5 billion (Rs. 21,000 crore) from this transaction, based on current exchange rates. This sum includes an enterprise value of around $2 billion (Rs. 16,640 crore) for ATC India and a ticking fee that will accrue from October 1, 2023, until the deal's completion. The proceeds also take into account the repayment of existing intercompany debt and a term loan in India by DIT.
Implications for ATC
The company will maintain the full economic benefit linked to the optionally converted debentures (OCDs) issued by Vodafone Idea. It will also be eligible to obtain future payments connected to existing ATC India receivables. American Tower plans to use the funds from this transaction to pay off its outstanding debt, thus enhancing its financial stability.
Advisors for the ATC India-DIT deal
Citi is acting as the lead financial advisor for this major deal, with CDX Advisors also offering financial guidance. Talwar Thakore & Associates are serving as the main legal advisors for American Tower. However, cautionary notes regarding forward-looking statements have been released in the press release, highlighting that actual outcomes may differ due to various factors.
