Brookfield Infrastructure Partners on Wednesday said that it expects to close its acquisition of 130,000 from Reliance Jio shortly. The development was shared by Sam Pollock, CEO of Brookfield Infrastructure in the second quarter earnings call on Wednesday. The company had earlier reported its second quarter results for the period ended June 30, 2020 with Brookfield Infrastructure recording a net loss of 61 million. In the previous year quarter, the company posted a net income of US$98 million. Brookfield Infrastructure said that its overall revenues for the period ended June 30, 2020 stood at US$1,946 million as compared to US$1,685 million during the same time in 2019.
Brookfield Infrastructure Expects to Close Reliance Jio Tower Acquisition Shortly
In December 2019, Brookfield Infrastructure said that it entered into a binding agreement to acquire 100% stake in a tower company from Reliance Industrial Investments and Holdings (RIIHL), a wholly owned subsidiary of Reliance Industries. The company said that it is acquiring approximately 130,000 towers that are the network infrastructure backbone of Reliance Jio. “These are recently constructed assets that are strategically located for pan-India 4G coverage,” Brookfield Infrastructure, said in a release in December 2019. “These towers are well-positioned from a competitive perspective as they are largely connected by fibre backhaul, which provides a unique platform to capitalise on the rollout of 5G and future technologies.” Pollock in the earnings call on Wednesday said that the company received “positive feedback” from the Indian regulators “that the remaining approvals are on track.” Further, Pollock highlighted that Reliance Jio raised around US$20 billion from various technologies and other private equity investors since Brookfield Infrastructure announced the Reliance Jio tower acquisition.
Multiple Factors Including COVID-19 Caused Delay in Reliance Jio Tower Acquisition
Pollock said that the delays in getting the approval for the acquisition of Reliance Jio towers was a “mix of a number of factors” including COVID-19 causing a delay. “Obviously, COVID impacted all regulatory approvals around the world. Things were not as efficient,” Pollock said. “The Indian market can sometimes be less efficient from a regulatory perspective than others, so that’s a factor.” Crucially, Pollock highlighted that Brookfield Infrastructure will invest approximately US$500 million of equity post its acquisition of Reliance Jio towers. “We expect this acquisition to be accretive to our overall cash flow,” Pollock said.
