Tata Tele, IDFC offers to sell stake in ATC’s Indian mobile tower arm for Rs 2,940 crore

Tata Teleservices (TTL) has offered to sell half of its stake and IDFC its entire stake in mobile tower company ATC TIPL to majority shareholder American Tower Corporation (ATC) for Rs 2,940 crore.

TTL has also offered to pay $320 million or about Rs 2,360 crore to ATC Telecom Infrastructure Pvt Ltd (ATC TIPL) for termination of lease obligations following closure of its mobile services business and it affiliates, according to a regulatory filing by ATC.

“Tata Teleservices delivered to the Company notice of exercise of their put options under the shareholders agreement with respect to 50 per cent of their combined holdings with Tata Sons of ATC TIPL,” the filing said.

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TTL will have option to sell another 50 per cent stake in ATC TIPL in the beginning of next fiscal year.

Additionally, IDFC delivered notice to ATC of exercise of its put option under the shareholders agreement with respect of 100 per cent of its holdings of ATC TIPL.

“The Company expects to complete the redemption of the put shares, subject to regulatory approval, for total consideration of Rs 29.4 billion (approximately $400.0 million) in the first quarter of 2019,” the filing said.        

In October 2015, ATC bought 51 per cent stake in Viom from Tata Teleservices Ltd and SREI Infrastructure Finance for Rs 7,635 crore. After acquiring majority stake, ATC named the firm as ATC Telecom Infrastructure Private Limited.

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ATC TIPL is the second largest private telecom tower firm in India with a portfolio of around 78,000 mobile towers.

Tata Teleservices stake in Viom Networks came down to 26 per cent after ATC acquired majority stake in the company and merged its existing Indian business.

ATC later merged its wholly-owned subsidiary with ATC TIPL which increased its shareholding in the tower firm to 63 per cent. The rest of the stake in ATC TIPL is held by Tata Sons, Tata Teleservices, IDFC Private Equity Fund III, Macquarie SBI Infrastructure Investments Pte Limited and SBI Macquarie Infrastructure Trust.

TTL was also one of the tenants of ATC TIPL for mobile services. With closure of the mobile services, TTL has agreed to pay one-time settlement charges to ATC TIPL. 

“As part of the arrangement, the company will receive an upfront one-time “INR-denominated cash payment” equal to approximately $320 million for the termination of lease obligations with Tata Teleservices in India,” the filing said.