Blackstone, Carlyle in Talks with Reliance Communications

India’s Reliance Communications is in exclusive talks with private equity firms Blackstone Group and Carlyle Group to sell its telecoms tower unit, Reuters reported, citing the Times of India. A consortium of Blackstone and Carlyle was likely to complete a deal by December that was expected to value the towers at more than $3.5 billion, the newspaper said, citing an unnamed source familiar with the process.

(Reuters) – India’s Reliance Communications is in exclusive talks with private equity firms Blackstone Group LP and Carlyle Group to sell its telecoms tower unit, the Times of India reported on Friday, citing an unnamed source.

Reliance, controlled by billionaire Anil Ambani, has spent a year looking for a buyer for the 95-percent stake in its Reliance Infratel tower unit, as the country’s No.2 mobile phone carrier by subscribers struggles with its more than $7 billion net debt.

A consortium of Blackstone and Carlyle was likely to complete a deal by December that was expected to value the towers at more than $3.5 billion, the newspaper said, citing an unnamed source familiar with the process.

Reliance has hired UBS and sought $5 billion for the tower business, but potential bidders had expressed concern about Reliance’s valuation being at least $1 billion too high.

A Reliance spokeman declined to comment on the report when contacted by Reuters. Spokesman for Carlyle and Blackstone also declined to comment.

India’s cellular market is the world’s fast-growing, but ferocious competition, low call prices and high operational costs are squeezing margins of operators.

Last year, Reliance tried to sell a 26-percent stake in itself to pare debt, but found no takers. A plan to float the tower unit in an initial public offering also failed to take off and a deal to merge its tower arm with a rival collapsed.