The Department of Telecommunications has approved the Rs 25,215 crore deal between Reliance Jio and Brookfield Infrastructure.
A SEBI filing said, "The DoT through its letter dated August 11, 2020 has approved Rs 1,053.50 million downstream foreign investment for acquisition of the remaining 49 per cent of the paid-up equity share capital of Tower Co. from RIL by the Trust."
Further, the department has also approved the increase in foreign investment in Tower Co. to 100 per cent of the paid-up equity share capital.
In December last year, Reliance Industrial Investments and Holdings Limited (RIIHL), a wholly owned subsidiary of Reliance Industries Limited (RIL) entered into an agreement under which it will receive Rs 25,215 crore investment by Canadian entity Brookfield Infrastructure and its institutional partners in its tower infrastructure trust.
As per the deal at the closing of the transaction, the trust will own 100 per cent of the issued and paid up equity share capital of Reliance Jio lnfratel Private Limited (RJIPL).
DoT gave the approval subject to the condition - "The Tower Co. shall ensure compliance with the InvIT Regulations" and "the investment of Rs 2,52,150 million by the Brookfield Sponsor and other investors into the Trust by way of the Issue should be in compliance with applicable FEMA rules and regulations and the InvIT Regulations".
Further, the Rs 25,000 crore trust loan to be provided by the trust to the tower company should be in compliance with the extant provisions of the law.
The approval of the DoT is also subject to, amongst others, foreign investors not being provided any assured return on exit, compliance with pricing guidelines, documentation and reporting requirements of the Reserve Bank of India and compliance with other applicable laws, the filing said.
The Centre had sought the view of the Securities and Exchange Board of India (SEBI) on whether the debt-equity ratio of the deal is compliant with its guidelines for infrastructure investment trusts (InvITs). The approval was finally given after Jio clarified the doubts raised by the Ministry of Home Affairs, DoT and SEBI.