American Tower Corporation has finalized a $2.5 billion agreement with Data Infrastructure Trust (DIT), backed by Brookfield Asset Management, as part of the strategy to review India business.
American Tower earlier said its global revenue rose 5.5 percent to $2,819 million, while property revenue grew 7 percent to $2,792 million and net income fell 29.6 percent to $577 million in Q3 2023.
American Tower was expecting India business to contribute $1,095 million in property revenue and $355 million Adjusted EBITDA for 2023.
American Tower in Q3 recorded a goodwill impairment charge of $322 million related to its value of Indian business.
According to the deal, DIT is poised to secure complete equity interests in American Tower’s operations in India, known as ATC India. Currently, DIT already hosts Brookfield’s telecom tower ventures in India through Summit Digitel and Crest Digitel. The transaction marks the conclusion of the strategic review previously announced regarding American Tower’s Indian operations.
At the time of closing, subject to specific pre-closing terms, American Tower stands to gain total cash proceeds, potentially amounting to around INR 210 billion, equivalent to $2.5 billion in today’s exchange rates. This includes an enterprise value of approximately $2.0 billion for the ATC India operations, along with a ticking fee accruing from October 1, 2023, up to the closing date.
The projected proceeds encompass assumptions regarding the repayment of existing intercompany debt and the discharge or assumption of the ongoing India term loan by DIT. Additionally, American Tower retains full economic benefits linked to the optionally converted debentures (OCDs) issued by Vodafone Idea and stands eligible for future payments related to existing ATC India receivables. These proceeds are earmarked for the repayment of American Tower’s prevailing debts.
ATC India has around 78,000 telecom sites scattered across India. This transaction marks Brookfield’s third major foray into India’s telecommunications sphere. In 2022, Brookfield made headway by acquiring 5,000 indoor business solution sites and small cell sites, playing a pivotal role in 5G expansion and bolstering telecom operators’ coverage in challenging and densely populated areas.
Adding to this, Brookfield secured a portfolio of roughly 175,000 towers in 2020 from Reliance Industrial Investments and Holdings.
ATC India said it will integrate into DIT, augmenting its existing telecommunications assets. The influx of new sites is projected to diversify DIT’s revenue streams and amplify engagement with all mobile network operators in India.
Arpit Agrawal, Managing Director and Head of Infrastructure for India & the Middle East at Brookfield, expressed enthusiasm about the venture, stating, “Strategic acquisitions like ATC India underscore our steadfast commitment to bolstering digital connectivity and revolutionizing the telecom infrastructure landscape in the region.”
In India, Brookfield commands an asset base of approximately $25 billion under various umbrellas, including Infrastructure, Real Estate, Renewable Power & Transition, and Private Equity.