(Reuters) – Private equity New Silk Route, which owns majority stake in a tower leasing firm, is looking to merge the unit with India’s Essar Telecom Infrastructure, the Economic Times reported on Tuesday, citing a person familiar with the development.
Aster Infrastructure, based in the southern Indian city of Hyderabad, provides telecom towers and its clients include Bharti Airtel (BRTI.BO), Reliance Communications (RLCM.BO) and Idea Cellular (IDEA.BO), its website showed.
The Ruias, who own Essar Telecom, recently appointed Barclays Capital to find out strategic partners, the paper said.
“The odds for the deal to go through are 50:50, talks are still in the initial stages,” the paper quoted an unnamed executive familiar with development as saying.
If a deal happens, New Silk will then look for a stake sale in the combined entity, the paper said.
A spokeswoman for Essar Telecom was not immediately available for comment.
The paper said New Silk Route said it would not comment on speculation while Essar Group declined to comment.
The Essar Group is also in talks with two other strategic investors for a stake sale or even a complete sale of its tower assets, the paper said.
The Indian telecom tower segment is undergoing consolidation.
Tata-Quippo and GTL Infrastructure (GTLI.BO) are front runners to buy all or part of the tower holdings of Aircel, a unit of Malaysia’s Maxis.
(Reporting by Janaki Krishnan; Editing by Ranjit Gangadharan)