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Tata-Quippo eyes PE funds for Aircel acquistion
By siliconindia
Mumbai: Tata-Quippo, the telecom tower venture between the Tatas and Kolkata based Kanorias of Srei group, is in advanced stages of negotiations with New York-based private equity fund Apollo Management to finance acquisition of cellular operator Aircel's tower assets, should it win the bid, reports Economic Times.
A person close to the matter said that Tata-Quippo had emerged as the front-runner for the acquisition of Aircel's 12,000 towers, pegged at around $1.2 billion to $1.5 billion (
5,555 crore to 6,945 crore at current exchange rate), and had submitted its bid last week.
Other bidders included Reliance Infratel, a subsidiary of Reliance Communications, Global Telesystems, or GTL, and Indus, a company that controls the tower assets of Bharti Airtel, Vodafone and Idea Cellular. Some more are expected to follow suit.
Apollo Management, which manages over $37 billion of investor funds, was willing to provide as much as $1 billion to finance Tata-Quippo's acquisition of the tower assets of Aircel. If completed, it will be the single largest private equity investment in India.
While the details of the transaction are still being firmed up, the deal may involve Apollo picking up a stake in Tata-Quippo. Post the buyout of Aircel's tower assets, Apollo could end up owning around 30 percent in the combined entity, sources close to the transaction said.
When contacted, Sunil Kanoria, a Director of Tata-Quippo said, "We are in discussions with a few global private equity players. We will zero in on a PE partner if we win the bid." General Atlantic and Apax Partners are also believed to be interested in striking an alliance with Tata-Quippo. However, ET could not independently confirm this. Aircel COO Gurdeep Singh refused to comment, while Apollo could not be reached for comment.
Malaysia's Maxis Communications, which owns a 74 percent stake in Aircel, has appointed Standard Chartered, Nomura and Rothschild as advisers to sell the tower assets of its Indian arm. A deal is expected to be announced in a month.
Another person close to the deal said that a partnership with Apollo would provide financial muscle to Tata-Quippo while providing the foreign private equity fund an entry into what is being seen as a potentially lucrative segment of the Indian telecom space. The deal also made sense, as Maxis was not keen to sell its stake to a pure-play PE fund.
The transaction, if it happens, would scale up Tata-Quippo's ownership of towers to over 50,000 by the end of this financial year from its existing 30,000. Indus Towers, another contender, is the world's largest tower company with 1,00,000 towers.
Tata-Quippo would also need substantial investment and operational expertise to triple its tower
base over the next few years. Post deal, Tata-Quippo, which is now the preferred vendor to Tata Teleservices, the telecom arm of the Tata Group, will also become the preferred vendor to Aircel.
Tata-Quippo was formed through the merger of the telecom tower operations of Tata Teleservices and Quippo early this year. Quippo holds a 49 percent stake in the merged entity while Tata Teleservices owns 51 percent. Though officially known as Wireless Tata Telecom Infrastructure, it's popularly referred to as Tata-Quippo.
5,555 crore to 6,945 crore at current exchange rate), and had submitted its bid last week.
Other bidders included Reliance Infratel, a subsidiary of Reliance Communications, Global Telesystems, or GTL, and Indus, a company that controls the tower assets of Bharti Airtel, Vodafone and Idea Cellular. Some more are expected to follow suit.
Apollo Management, which manages over $37 billion of investor funds, was willing to provide as much as $1 billion to finance Tata-Quippo's acquisition of the tower assets of Aircel. If completed, it will be the single largest private equity investment in India.
While the details of the transaction are still being firmed up, the deal may involve Apollo picking up a stake in Tata-Quippo. Post the buyout of Aircel's tower assets, Apollo could end up owning around 30 percent in the combined entity, sources close to the transaction said.
When contacted, Sunil Kanoria, a Director of Tata-Quippo said, "We are in discussions with a few global private equity players. We will zero in on a PE partner if we win the bid." General Atlantic and Apax Partners are also believed to be interested in striking an alliance with Tata-Quippo. However, ET could not independently confirm this. Aircel COO Gurdeep Singh refused to comment, while Apollo could not be reached for comment.
Malaysia's Maxis Communications, which owns a 74 percent stake in Aircel, has appointed Standard Chartered, Nomura and Rothschild as advisers to sell the tower assets of its Indian arm. A deal is expected to be announced in a month.
Another person close to the deal said that a partnership with Apollo would provide financial muscle to Tata-Quippo while providing the foreign private equity fund an entry into what is being seen as a potentially lucrative segment of the Indian telecom space. The deal also made sense, as Maxis was not keen to sell its stake to a pure-play PE fund.
The transaction, if it happens, would scale up Tata-Quippo's ownership of towers to over 50,000 by the end of this financial year from its existing 30,000. Indus Towers, another contender, is the world's largest tower company with 1,00,000 towers.
Tata-Quippo would also need substantial investment and operational expertise to triple its tower
base over the next few years. Post deal, Tata-Quippo, which is now the preferred vendor to Tata Teleservices, the telecom arm of the Tata Group, will also become the preferred vendor to Aircel.
Tata-Quippo was formed through the merger of the telecom tower operations of Tata Teleservices and Quippo early this year. Quippo holds a 49 percent stake in the merged entity while Tata Teleservices owns 51 percent. Though officially known as Wireless Tata Telecom Infrastructure, it's popularly referred to as Tata-Quippo.