Armed with a war chest of over Rs 10,000 crore, the Brookfield Asset Management Inc is all set for towering deals in the telecom infrastructure space. The Canada’s largest alternative investment fund with a penchant for buying out stressed assets, is reportedly in ‘advanced’ talks with three major telecom tower players – Bharti Infratel, GTL Ltd and Reliance Communications Ltd to buy majority stakes in the venture.

Brookfield signed a memorandum of understanding (MoU) with the country’s largest state-owned lender State Bank of India (SBI) to set up a joint venture to invest in stressed assets in India in July. The Canadian fund plans to put about Rs 7,000 crore into the venture and SBI would contribute as much as 5% (about Rs 350 crore) for a 5% stake in the JV.

“The talks are in an advanced stage, but a major negative being played out is the potential impact of Reliance Industries subsidiary Reliance Jio, which has made a shock and awe entry into the data and voice space. Jio is on a warpath with entrenched players as well as telecom regulators over quality of service (QoS) set by Telecom Regulatory Authority of India (Trai) and the umbrella association of private telecom providers Cellular Operators Association of India (Coai),” said a leading executive of a mobile telephony company.

“Reliance Jio has queered the pitch with a big bang entry taking all by surprise. The company has reportedly made its gambit in the sector and with its 360 degree presence on the digital media platform, it is sure to rise the pitch in coming days,” a telecom analyst with a leading domestic brokerage house said on conditions of strictly not to be named.

“Indian firms are facing decreased access to capital as the country’s central bank pushes lenders to address stressed loans on their balance sheets rather than extend new credit, Brookfield is weighing new Indian investment targets after agreeing last month to buy Reliance Communications Ltd’s mobile-phone tower business for an upfront payment of Rs 11,000 crore.”

Similarly, Sunil Bharti Mittal, the once uncrowned king of mobile telephony in the country so far is reportedly in talks with the Toronto-based Alternative Investment Fund to sell a majority stake in Bharti Infratel. “Brookfield is reportedly in talks with Bharti Infratel Ltd., which has formed a panel of directors to evaluate options to sell majority stake in tower company Bharti Infratel Ltd,” sources in the know said.

Bharti Infratel, in the past, has divested stakes in Infratel in piece meals to a clutch of private equity investors led by Temasek, KKR and others in 2008. This company aalso hit the market with its maiden share float (IPO) in 2012. As on date, Airtel holds 71.96 in infratel.

Sources said GTL Ltd one of the largest telecom tower company in the country which has had a botched up deal with Anil Ambani firm Reliance Telecom, is also in the radar of the Canadian fund for picking up a majority stake. GTL is staring at the prospectus of going strategic debt restructuring (SDR) scheme or Scheme of Sustainable Structuring of Stressed Assets (SSA) cleared by the Reserve Bank of India (RBI). The company has roped in an external agency to brief about the alternative debt reduction schemes to prospective lenders. The proposal, which is yet to get necessary clearances, has however been okayed by the Board of Directors of GTL.

The towering ambition of the company to make a telecom infrastructure behemoth by merging with Reliance Communications Ltd was jinxed by the towering debt piled up by both the companies. If the merger had fructified, it would have paved the way for the largest telecom infrastructure combine in the country with an enterprise value of not less than Rs 50,000 crore and created the world’s largest independent telecom infrastructure firm, operating 80,000 towers, with 1,25,000 tenancies from 10 telecom firms.

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