CCI clears Reliance's divestment of Jio telecom tower assets to Brookfield

Fair trade regulator CCI has approved divestment of Reliance Jio's telecom tower assets to Canada's Brookfield Infrastructure Partners LP and other investors.

The other investors include British Columbia Investment Management Corporation, GIC Infra Holdings Pte Ltd's subsidiaries Anahera Investment Pte Ltd and Valkyrie Investment Pte Ltd.

In a tweet on Monday, the regulator said it "approves subscription of the units of Tower Infrastructure Trust by BIF IV Jarvis India Pte., British Columbia Investment Management and GIC Investors."

The proposed transaction involves the acquisition of indirect control of Reliance Jio Infratel Pvt Ltd (RJIPL) by Jarvis, the Competition Commission of India (CCI) noted in a combination notice filed with it.

Tower Infrastructure Trust, an InvIT, currently holds 51 per cent of the outstanding equity share capital of RJIPL. Current Sponsor of the InvIT is Reliance Industrial Investments and Holdings Ltd (RIIHL).

The deal, as per the notice, is subject to receipt of requisite approvals from markets regulator Sebi. Jarvis would execute the "deed of accession" to the trust deed and be designated as one of the sponsors to the InvIT in addition to RIIHL.

Besides, Jarvis would subscribe to the majority of the units to be issued by the InvIT.

"Jarvis, subscribing to the units of the InvIT, subject to receipt of necessary approvals from SEBI, will discuss and mutually agree with the Parties on suitable mechanism, in accordance with the provisions of SEBI InvIT Regulations, for change of the current investment manager to an entity nominated and controlled by Jarvis," the notice said.

The parties are Jarvis, British Columbia Investment, GIC investors, InvIT, and RJIPL.

From the proceeds of the issuance of units, the InvIT proposes to acquire the remaining 49 per cent of the outstanding equity share capital in RJIPL.

Additionally, GIC Investors and British Columbia Investment propose to acquire a minority interest in the InvIT by either directly subscribing to units of the InvIT, or by indirectly acquiring an interest in the InvIT through acquisition of shares in BIF IV India Holdings.

In December 2019, RIL said its unit, Reliance Industrial Investments and Holdings Ltd (RIIHL) has inked binding agreements with Brookfield Infrastructure Partners LP and its partners for the tower business deal.

Brookfield will buy out 100 per cent equity of the operating tower company.

RIIHL "has entered into binding agreements with Brookfield Infrastructure Partners LP, and its institutional partners, for an investment of Rs 25,215 crore in the units to be issued by the Tower Infrastructure Trust," the company had said in a statement.

Under the deal, RIIHL, the sponsor of Tower Infrastructure Trust, would issue units in the trust to Brookfield affiliate BIF IV Jarvis India and some co-investors.

After the deal is closed, the Canadian alternative assets manager, Brookfield and its partners would become sponsors of the trust, holding 100 per cent of India's largest telecom tower company with 1,30,000 towers through Tower Infrastructure Trust, while the RIL subsidiary would become a co-sponsor, but will hold no units.

This is the single largest foreign investment in an Indian infrastructure vehicle.

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