Open for tower sharing agreement with telecom players: SREI

As part of its strategy to unlock value in its existing assets, SREI Infrastructure Finance is likely to dilute part of its stake in Viom Networks, CMD Hemant Kanoria told CNBC-TV18 in an interview. However, he said, the company has not intentions to make an exit from the tower business.    The infrastructure company is also exploring options of a LSE listing for Viom.

Below is the verbatim transcript of the interview: Q: We do understand that SREI Infrastructure or Viom is actually looking for an overseas listing or the company as a whole is looking to pair off some amount of stake in strategic investments. Can you just take us through the overall plan including Viom’s overseas listing?A: From the SREI perspective, we have a lot investments which are there and these were strategic investments which were made and with a very clear cut direction that at an appropriate time we will dilute some stake and the company will be in a position to get much higher profit then it is generally having and that was the reason for making these strategic investments. So, now as the market is reviving and there are certain opportunities because of the government having coming out with a new notification of unlisted companies getting listed overseas, we are therefore exploring various opportunities as many of the businesses are doing very well like the telecom tower business, Viom is doing well, the power is doing well, our road portfolio also that we have many of the road projects have started tolling. The toll collections are much higher than what was estimated. So, therefore operationally all the companies are in the strategic investment portfolio that we have; many of them are doing quite well and it is time for us to monetise some of those investments, as per our strategy.Q: You indicated that the valuation for Viom according to bankers stands at Rs 20,000-27,000 crore. SREI has about 18-18.5 percent stake in Viom. How much are you looking to dilute or are you looking to completely exit out of Viom to monetise?A: We are not looking at an exit at all. As per our strategy, these are strategic investments due to which the business is doing well so there would be some small dilutions which will take place where the company can realise the value. As and when the value keeps on increasing, we may keep on diluting something but there is no strategy at this juncture to exit.Q: Have you already approached bankers for the same?A: Investment bankers are already in touch with us for the last 1.5-2 months. So, therefore we are already discussing with them after the notification of the government of India came down. So, many of the investment bankers have made their presentations and we are doing our homework internally.Q: Is it likely that you will be able to complete this listing on LSE in FY15, in the next one year? A: Yes, definitely because we have to do that. We are already on the job there.Q: So, how soon, would it be in the first quarter, second quarter? At what stage have you progressed with your listing plans? A: At present, there is a lot of internal homework which has to be done from the perspective of accounting due diligence on the legal side. After that, as we are all awaiting what will be happening in the election because after the election, the picture for India will be clearer and overseas investors’ interest can then be seen thereby understanding their level of interest. Therefore, all these things are work in progress.

Q: Would a possible tower sharing pact also be on the cards considering that we have seen that take place with Rel Jio and two players already and the latest being with Bharti Infratel today? Have you been approached, would that be an opportunity that you might be exploring?A: Definitely. We are always open to increase tenancy on our towers and in any possible way, any of the telecom operators who want to come on our towers whether with this 3G, 4G for the data connectivity, we would be very open to that.Q: Have you been approached by Rel Jio for any possible tower sharing agreement?A: No. Our team is already in touch with all the potential people who can come in. I can only say that at this juncture.Q: Besides Viom which are the other strategic investments that you would look to pare off some amount of stake in?A: It is a road portfolio. We are already having and I think that one of the roads we are already almost at the final stage. Therefore, we are looking at various stake dilutions to monetize to get the higher profits coming into shape.Q: Which would be the road projects?A: We will declare it at an appropriate time and as you know that we are a listed company, we can only give you a general broad perspective of things.Q: Could you tell us the total size of these strategic investments combined in roads, in power, what is the investment that you currently have and also by the end of FY15, your total plan by way of monetization, how much you are looking to garner?A: It is an ongoing process for us. It is not going to be monetization at one particular time. There is a huge portfolio, which the company has created goes on the loan portfolio and a strategic investment. So therefore, whichever is going to give higher profits to the organization year-to-year, we would keep on monetizing it. There is no desperation that we have to sell because we have to reduce our debt, none of these particular projects are at any level, which is at high debt level. All are at absolutely the appropriate level on debt. So therefore it is just value optimization is what we keep on looking at and maybe that the market is reacting on the share price because as it is we feel internally that the prices are very low.