Foreign banks lining up to fund Bharti-MTN deal: report
18 Aug 2009
Bharti Airtel, pursuing a tie-up with South Africa's biggest mobile services provider MTN, seems to be having little difficulty now in finding backers to fund the deal. According to a report in The Economic Times, it has received bids from more than a dozen overseas banks, as credit conditions ease up.
Bharti, India's largest mobile company by subscribers as well as revenue, had called for fresh indicative financing bids from banks, and the paper quoted bankers as saying a total 13 banks from the US, Europe and Asia had put in bids, each for an amount of $500 million, before the Monday 10 am deadline.
The company is likely to decide on the banks by the middle of this week, and finalise the financing by 29 August, the report said. It quoted investment bankers ''familiar with the matter'' as saying Bharti was now looking at an overseas loan component of around $3-$3.5 billion, and a rupee funding of around $1.5-$2 billion.
The rupee component of the financing is double initial estimates, and reflective of the strong interest among Indian banks to have a slice of the transaction.
The long-ongoing confidential talks between the two telecom majors have been extended till the end of the month. Under the initial proposal, Bharti would be the biggest shareholder in the merged group, taking a 49 per cent stake in MTN, while MTN shareholders would have an effective 36 per cent stake in Bharti.
The combined entities would straddle Africa, Asia and the Middle East, and have more than 200 million subscribers, $20 billion in annual revenues, and become the world's third-biggest mobile operator by subscribers.
