In a major FDI go-ahead, the Cabinet Committee on Economic Affairs on Wednesday approved American Tower Corporation’s 51 per cent stake buy in domestic telecom tower firm Viom Networks for Rs 5,857 crore.
ATC President and CEO James D Taiclet, who is on a visit to India, said the company is investing $1.17 billion to acquire 51 per cent controlling stake in Viom and will grow this by a similar amount when it increases its stake to 100 per cent.
“Singapore-based mobile tower company ATC Asia Pacific has decided to make an investment of Rs 5,856.51 crore to buy 51 per cent stake in Indian company Viom Networks. ATC Asia Pacific is a wholly-owned subsidiary of American Tower Corp,” Union minister Ravi Shankar Prasad told reporters after the CCEA meeting.
The company is keen to participate in a big way in initiatives like Digital India as it considers India as a big market in terms of communications.
Taiclet also met Prasad yesterday and conveyed the intention to invest more in India.
“We are investing $1.17 billion to acquire 51 per cent controlling stake in Viom and will grow this by a similar amount when we increase our stake to 100 per cent,” he said in a statement to news agency PTI.
The approval on its proposed acquisition of 51 per cent stake in Viom is the highlight of his India trip, he added.
“Chief of ATC James Taiclet... Has assured me that they will invest $2 billion more because India in terms of communications is a very big emerging market,” Prasad said.
Taiclet said the company is committed to strengthening its India operations and has already invested over $800 million since its launch in India in 2007.
“India is a priority country for us and post Viom acquisition, our portfolio of 57,000 towers will be our largest presence in any country globally,” he said.
The acquisition of Viom makes ATC the leading independent telecom infrastructure provider and will allow it to better serve customers as it rolls out its 3G/4G networks, said Amit Sharma, President Asia for ATC.
ATC in October 2015 announced to buy 51 per cent 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.
Under the agreement, ATC may also acquire or be required to acquire all or a portion of the remaining 49 per cent 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 owns 54 per cent of Viom while the Kolkata-based SREI Group of Kanoria family holds 18.5 per cent 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 per cent stake and will also acquire stake from other shareholders.
“Tata Teleservices stake will come down to about 34 per cent from the current 54 per cent now and further it would reduce to 26 per cent after ATC merges its Indian business with Viom,” said Sunil Kanoria, Vice-Chairman of SREI Infrastructure Finance.