Bharti Airtel board on Saturday approved the company?s plans to acquire Kuwaiti telecom firm Zain?s Africa operations for $9 billion. The board discussed the funding plans in detail for the acquisition, sources said, adding Singapore?s SingTel, which has around 32% sake in Bharti, was also present at the meeting.
Though the exact funding details firmed up by the company were not available, sources said Bharti was confident of concluding the deal by March 25, the day the two sides had set for concluding their exclusive talks.
As reported earlier, Bharti is looking at raising up to $8.5 billion in offshore loans to fund the deal and has issued a term sheet to banks.
It is likely that Zain may be asked to provide legal protection from a dispute in Nigeria, though the Bharti board has not insisted upon it. As reported earlier, Johannesburg-based Econet Wireless Holdings Ltd is disputing control of Zain?s unit in Nigeria. Econet CEO Strive Masiyiwa was reported to have said on March 18 that there had been no agreement or settlement in the dispute over the Nigerian unit, in which Zain has 65% stake.
One of the solutions being talked about is that Bharti could put part of the purchase price in an escrow account till an amicable solution is arrived at.
Bharti and Zain are in exclusive talks until March 25 to complete a transaction that would give the Indian telecom major access to 42 million new subscribers spread over 15 African countries. A Bharti spokesperson declined to comment.
Bharti had valued Zain Africa at $10.7 billion, but after deducting the company?s net debt of $1.7 billion, had said its total payout would be $9 billion (around Rs 44,000 crore).
The two sides have agreed that of the $9 billion, $700 million would be payable a year after the deal is announced. Thus the immediate payout from Bharti?s end would be $8.3 billion.
Standard Chartered Bank has been appointed one of the bankers to the deal owing to its greater exposure in the African region. Barclays Bank and StanChart are Bharti’s advisors on the acquisition and State Bank of India is also learnt to be part of the loan syndicate.