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American Tower Corporation has announced that it has closed the previously announced sale of 100% of the equity interests in its operations in India (ATC India) to Data Infrastructure Trust (DIT), an Infrastructure Investment Trust sponsored by an affiliate of Brookfield Asset Management (Brookfield). Total cash proceeds to American Tower associated with the transaction represents approximately INR 210 billion, or US$2.5 billion at today’s exchange rates. Total cash proceeds include approximately US$320 million associated with the monetisation of optionally converted debentures issued by Vodafone Idea and payments on ATC India receivables, net of withholding tax, and approximately US$2.2 billion of final proceeds at closing. Such proceeds are expected to be used to repay American Tower’s existing indebtedness, including the repayment of the existing India term loan at closing. No further proceeds associated with this transaction are anticipated.

American Tower completes US$2.5B sale of Indian operations to Data Infrastructure Trust

Data Infrastructure Trust, a telecom-focused infrastructure investment trust (InvIT), plans to raise up to Rs 6,666 crore from its sponsor Brookfield, Singapore’s GIC and Canadian pension fund British Columbia Investment to fund the acquisition of US-based American Tower Corporation’s telecom portfolio in India. Data Infrastructure Trust had on January 4 announced that it will acquire ATC’s India telecom business comprising 78,000 towers for an enterprise value of Rs 16,500 crore (subject to pre-closing terms). The acquisition is expected to be completed by the next month. This will be Brookfield’s third acquisition in the Indian telecommunications space. In 2022, it had picked up a portfolio of 5,000 indoor business solution sites and small cell sites. Brookfield also has a portfolio of roughly 175,000 towers that were acquired in 2020 from Reliance Industrial Investments and Holdings Limited. The board of Data Infrastructure Trust has approved a plan to raise the funds from the three investors through a private placement of 444.4 million units of the InvIT at a price of Rs 150 per unit, filings show.

Tower InvIT Data Infra Trust to raise Rs 6,600 cr from Brookfield, GIC, British Columbia for ATC deal

The telecom tower infrastructure business is capital-intensive, as companies need to incur a significant amount of capital expenditure for setting up towers, which increases the consolidated leverage of Data InvIT resulting in consolidated external debt/PBILDT of 6.39x on March 31, 2024.

The domestic telecom industry is highly regulated and competitive, which can affect cash accruals and leverage profile of telecom companies. As SDIL has started onboarding other tenants, exposing SDIL to counterparty risks in terms of delay in payments by some of these other tenants, can impact its cash flows. Data InvIT’s ability to maintain healthy collection efficiency, especially for weaker tenants will be a key rating monitorable.

The issuer has made timely interest payments.

Mr. Dhananjay Joshi, Managing Director

SDIL has a fairly young tower portfolio, with an average age of less than five years, which is strategically located with minimal coverage overlap with competitors and has sizable space to accommodate multiple tenancies whereby around 89% of its tower portfolio has a tenancy potential of 2-4 tenants. This large and widespread portfolio of quality towers is expected to further strengthen DIT’s strong market position resulting in strong competitive advantage. 


DIT’s investments in passive telecom infrastructure has inherent strengths given criticality of the sector for the telcos, high customer stickiness, given the challenges in network re-organisation, and the stringent terms of the MSAs signed with the MNOs. The MSAs give revenue visibility, and make allowances for exit penalties, annual rental escalation, and ensure timely payments from customers.


Security Name: 8.00% Altius Telecom Infrastructure Trust 30 Aug 2034

ISIN:

INE0BWS07011

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Altius Telecom Infrastructure Trust

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American Tower completes US$2.5B sale of Indian operations to Data Infrastructure Trust

Tower InvIT Data Infra Trust to raise Rs 6,600 cr from Brookfield, GIC, British Columbia for ATC deal

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