Reliance Communications (RCOM) today said the demerger of the tower division of the Reliance Infratel (RITL) into Towercom Infrastructure (TIPL) has received the approval of its shareholders.

The shareholders of Reliance Infratel, a subsidiary of Reliance Communications at their meeting on 29 April, 2017, have approved the demerger with 98 percent majority.

Brookfield Infrastructure will acquire 100 percent of TIPL — creating the second largest independent and operator-neutral tower company in India. Indus Towers is the largest telecom tower in India.

The company has already received approval from Competition Commission of India for the proposed deal.

The company’s telecom towers demerged into TIPL will be 100 percent owned and managed by Brookfield Infrastructure.

RCOM will receive an upfront cash payment of Rs 11,000 crore or $1.7 billion), which will be used to reduce its debt.

The combination of RCOM’s wireless business with Aircel, and the monetization of tower business, will reduce RCOM’s overall debt by Rs 31,000 crore or $4.8 billion, or nearly 70 percent of existing debt.

RCOM will subscribe for Class B non-voting shares in TIPL, providing 49 percent economic upside in the towers business, based on certain conditions.

RCOM expects future value creation from the B Class shares, based on growth in tenancies arising from increasing 4G rollout by all telecom operators and fast accelerating data consumption.

RCOM and Reliance Jio will continue as major long term tenants of the TIPL along with other existing third party telecom operators.