SingTel – BT

SingTel, Bharti to form unit for MTN buy

India’s Bharti Airtel and partner Singapore Telecommunications (SingTel) plan to set up a separate company for the acquisition of South Africa’s MTN Group , the Business Standard paper said yesterday, citing unnamed sources.

The special purpose vehicle (SPV) will raise funds, including bridge loans, and may later sell American Depositary Receipts or Global Depositary Receipts to repay the debt, it said, citing sources close to the deal. The SPV would be a subsidiary of unlisted Bharti Telecom, which owns about 45 per cent in Bharti Airtel.

When contacted, a spokesman from SingTel, which has a stake of about 30 per cent in Bharti Airtel, declined to comment.

According to the paper, MTN would not be offered a stake directly in Bharti Airtel as that may push foreign ownership in the Indian firm beyond the limit of 74 per cent permitted by Indian law. ‘The move to float an SPV will help Bharti Airtel to continue being listed on Indian stock exchanges, while MTN’s (major shareholders) will be given a stake in the SPV,’ the paper said.

Bharti, India’s top mobile telecoms operator, could raise funds by diluting the equity of the SPV, or the stakes of Bharti founders or SingTel, it said.

Media and analysts estimate that Bharti may value MTN as high as US$50 billion. Merging the two firms would create the world’s sixth-largest mobile operator, with more than 130 million subscribers in around two dozen countries. A spokesman for Bharti declined to comment.

Bharti said last week that talks with MTN were preliminary and that no bid has been made. — Reuters

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