The Cabinet Committee on Economic Affairs Wednesday cleared the proposal of American Tower Corp (ATC) to acquire 51 percent stake in Viom Networks for Rs 5,856.51 crore.
New Delhi: The Cabinet Committee on Economic Affairs Wednesday cleared the proposal of American Tower Corp (ATC) to acquire 51 percent stake in Viom Networks for Rs 5,856.51 crore.
"Singapore-based mobile tower company ATC Asia Pacific has decided to make an investment of Rs 5,856.51 crore to buy 51 percent stake in Indian company Viom Networks. ATC Asia Pacific is a wholly-owned subsidiary of American Tower Corp. This is another important decision taken today by CCEA," Telecom Minister Ravi Shankar Prasad today said.
ATC in October 2015 announced to buy 51 percent stake in Viom, which owns and operates about 42,200 towers and has another 1,000 mobile phone masts under construction, from Tata Teleservices and SREI Infrastructure Finance.
"Yesterday, Chief of ATC James Taiclet came to meet me. He has assured me that they will invest USD 2 billion more because India in terms of communications is a very big emerging market," Prasad said.
Under the agreement, ATC may also acquire or be required to acquire all or a portion of the remaining 49 percent ownership stake in Viom.
Also, as a pre-condition for the deal, ATC's existing 14,000 telecom mobile masts will be merged with Viom.
This will result "in certain ownership adjustments," the statement said without elaborating.
Tata Teleservices Ltd owns 54 percent of Viom, while Kolkata-based SREI Group of Kanoria family holds 18.5 percent with management control. Singapore state investor GIC, Macquarie SBI Infrastructure Fund, Oman Investment Fund and India's IDFC Private Equity are other investors in the company.
ATC will buy all of Srei's 18.50 percent stake and will also acquire stake from other shareholders.
"Tata Teleservices stake will come down to about 34 percent from current 54 percent now and further it would reduce to 26 percent after ATC merges its Indian business with Viom," said Sunil Kanoria, Vice-Chairman of Srei Infrastructure Finance.
IDFC's private equity division will bring down its holding to 3.2 percent, while private equity fund SBI-Macquarie will retain its 11 percent stake.
Viom was formed in 2009 as a result of merger of mobile towers of Tata Teleservices and Quippo Telecom - a unit under Srei Group.