Finmin seeks Bharti-MTN deal details

Written by Corporate Bureau | New Delhi | Updated: Jun 23 2009, 06:19am hrs
The department of economic affairs (DEA) in the finance ministry has asked the department of telecommunications (DoT) to furnish the broad contours of the proposed Bharti Airtel-MTN deal that involves cash and share swap to the tune of $23 billion, to ascertain whether the deal would be in accordance with the FDI norms and the regulations of the telecommunications sector.

In a note written to the DoT additional secretary, Subodh Kumar, Govind Mohan, joint secretary in the department of economic affairs has stated, As per the reports, the deal involves a swap/cash transaction and a GDR issuance by Bharti. These transactions would have a material impact on the extent of the foreign investment in Bharti and would need to adhere to the sectoral cap as per FDI policy, as also a specific telecom sector regulations. According to the note the DEA apprehends that the deal could well present a change in the management and thus relevant nods inter-alia from FIPB will be required.

When contacted DoT officials said, Bharti has entered into exclusive negotiations with MTN till July 31.