Rogers Communications (RCI) said Friday it has signed a definitive agreement for a 7 billion Canadian dollars ($4.94 billion) equity investment from Blackstone (BX) and certain Canadian institutional investors.

The investment will give Blackstone a 49.9% ownership share and 20% voting rights in a new Rogers unit that will hold a minority portion of the company's wireless network, Rogers said.

Rogers said it will retain 50.1% interest and operational control of the unit, and will continue to consolidate its financials into the parent company's statements.

Net proceeds will be used to reduce the company's outstanding debt and improve its balance sheet position, with Chief Financial Officer Glenn Brandt stating the move is expected to cut leverage by nearly one full turn.

The newly formed unit is expected to return up to CA$400 million annually to Blackstone during the first five years, and Rogers has the right to purchase Blackstone's stake starting in year eight, according to Rogers.

The transaction is expected to close in Q2, subject to regulatory approvals and standard closing conditions, the company said.