Singapore’s sovereign wealth fund GIC said its affiliates have partnered with Canada’s Brookfield Infrastructure Partners and other co-investors in the $3.4-billion deal to acquire the telecom tower assets of Indian conglomerate Reliance Industries.
In a statement, GIC said the investment comprises a portfolio of around 135,000 communication towers that forms Reliance Jio Infocomm Limited’s (Jio) telecommunication network.
The towers were recently constructed and strategically located for cellular network coverage across the country.
“The portfolio offers resilient income and long-term value given India’s attractive data demand growth outlook as 4G and smartphone penetration is still very low,” said Ang Eng Sent, Chief Investment Officer for Infrastructure for GIC.
Jio is the anchor tenant of the tower portfolio under a 30-year Master Services Agreement, which will provide the tower company with a secure, long-term source of revenues, GIC added.
More towers are planned to raise the total number of towers in the transaction perimeter to approximately 175,000.
In a separate statement, Reliance Industries said the deal marks the single largest foreign investment in an Indian infrastructure vehicle.
Under the agreement, Reliance Industrial Investments & Holdings Limited (RIIHL), which is the sponsor of Tower Infrastructure Trust, will issue units in the trust to Brookfield affiliate BIF IV Jarvis India and co-investors, including GIC.
“Proceeds from the investment by Brookfield will be used to repay certain existing financial liabilities of RJIPL and acquiring the balance 49 per cent of equity share capital of RJIPL, currently held by RIL,” RIL said in a BSE filing in July.
After the deal is closed, Brookfield and its partners would become sponsors of the trust, holding 100 per cent of India’s largest telecom tower company, while RIIHL would become a co-sponsor, but will hold no units.
Bloomberg earlier reported that India’s government has approved the deal. The proposal was reportedly cleared by the finance and home ministries as well as the central bank in July.
GIC’s participation in the multi-billion deal comes as the Singapore wealth fund announced plans to deploy up to $1 billion in India through an investment platform that will expand its presence in the country’s infrastructure sector.
GIC, which was set up in 1981, manages over $100 billion in public and private investments across asset classes such as private equity, real estate, and public equity.
In infrastructure, GIC’s primary strategy is to invest directly in operating assets with a high degree of cash flow visibility and provide a hedge against inflation.