x Abu Dhabi, UAETuesday 25 July 2017

Banks line up to finance MTN Bharti merger

Region India's largest mobile telephone operator, Bharti Airtel, has received more than a dozen offers to finance its merger with South African peer MTN.

India's largest mobile telephone operator, Bharti Airtel, has received more than a dozen offers to finance its merger with South African peer MTN, the Economic Times of India reported on Tuesday. The two companies are working to create a tie-up that when complete, will result in one of the world's largest mobile telephone operators with annual income of around US$20 billion a year (Dh73bn), with assets in Africa, the Middle East and Asia. Bharti will take a 49 per cent stake in MTN, while the South African operator will get a 36 per cent stake in its Indian counterpart.

Citing banking sources, The Economic Times said Bharti Airtel had received bids from 13 overseas banks in the US, Europe and Asia, and that financing had been offered on better terms than those offered a month ago. The easing of the global credit squeeze has made financing both easier and cheaper to come by, which has worked in the favour of the deal that was originally mooted a year ago during the height of the financing squeeze, but fell apart after the two parties failed to agree on the structure of the merger. The deal was revived again in May.

Bharti hopes to raise up to $3.5bn to finance the deal, the Economic Times said. Meanwhile Dow Jones reports that MTN wants Bharti to raise its offer by more than $1bn, citing sources close to the situation. "The sweetener MTN is asking (for) is quite big. They want more cash and although Bharti is willing to go some way to increase the offer, they may end up with no deal. I wouldn't be surprised if the talks are extended for another month," one of the sources said.

With Agencies