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Viom to list if stake sale talks fail

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Sunil Kanoria
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Viom Networks, a telecom tower joint venture between Tata Teleservices and Srei Infrastructure, may go for listing if strategic stake sale doesn't happen.

Several prospective investors have reportedly backed out with American Tower Co still in the race.

"The negotiation process (for stake sale) is on. The first preference is stake sale. If it doesn't happen the listing will happen. We have made contingency plans," Sunil Kanoria, vice-chairman and managing director of Viom Networks, told dna.

The Kanorias control the management with both Sunil and Hemant Kanoria on the board.

Srei owns about 18% and controls management of Viom, which is majority owned by Tata Teleservices with 54% stake. The rest is with institutions like IDFC Private Equity, SBI Macquarie, Oman Investment Fund and GIC of Singapore. Srei's exposure in Viom stands at Rs 1,598 crore as on March-end.

Having turned around in fiscal 2013, earning a cash profit of Rs 929 crore in the last fiscal on a revenue base of Rs 4,629 crore, some of the investors are now looking at exiting.

After the Kanorias and the Tatas started sounding out prospective investors, private equity firms like Carlyle, Providence and also Malaysian telecom company Axiata joined the race.

But most of the contenders have reportedly left the race with only American Tower Corp staying put.

The Massachusetts, US, based company is present in India owning and operating over 12,000 tower sites throughout the country.

Kanoria however denied reports of most of the prospective investors deserting. "There is too much of media speculation happening. But deals like this take time to mature."

The delay in striking a deal, Kanoria indicated, revolves around the valuation aspect.

''"Obviously we want a good valuation as we have worked hard on achieving breakeven for the company," he said.

American Tower is believed to have put a price of of about Rs 19,000 crore for Viom's business with valuation being largely dependent upon the tower asset and their quality indicated by the tenancy ratio, or the number of tenants in each tower.

Viom claims 92,000 tenancies on over 42,000 towers that it has with clients like Tata Teleservices, Aircel, MTS and Telenor having contract periods ranging 10-20 years.

But with Reliance Jio entering the 4G space with promise to revolutionise mobile data services, valuation of towers of Viom, with whom it has a pact, have significantly upped the valuations.

If the stake sale process indeed fails, the Kanorias and the Tatas would go for listing. There have been plans to go for initial public offer in either New York Stock Exchange or London Stock Exchange.

Listing through a Real Estate Investment Trust is also being considered, Kanoria said.

"But the guidelines for REITs aren't clear yet. If by the time we decide to go for listing, the guidelines comes about, we may consider it. At present all options are open. But we can't put a deadline to the process like many things in life."

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