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Sun 21 Mar 2010 05:30 PM

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Bharti gets $8.3bn in funding for Zain purchase

Bharti will get $7.5bn in loans from bank group led by Standard Chartered and Barclays.

Bharti gets $8.3bn in funding for Zain purchase
PURCHASE: Bharti Airtel has obtained $8.3bn in funding for its proposed acquisition of Zain’s African assets.\n

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Top Indian telecoms firm Bharti Airtel said it had tied up the entire financing requirement of $8.3 billion for its planned buy of Kuwaiti telecom Zain's African assets, in a sign of progress as the deadline for the firms' talks expire next week.

Bharti and Zain are in exclusive talks until March 25, marking the third time the Indian firm has tried to get its hands on a meaningful African business after two failed bids for South Africa's MTN.

Bharti said in a statement on Sunday the financing, which would be the largest acquisition loan for an Indian borrower, was oversubscribed, with major international banks committing to underwrite the total amount.

RK Gupta, managing director, Taurus Asset Management, New Delhi, said: "I think such a statement at such a time makes one quite hopeful that they would be able to clinch a deal by the deadline."

He added: "This puts Bharti on a strong footing, one step closer to conclude the deal."

Bharti would pay a total $9 billion for acquiring Zain's assets in 15 African countries, and will also assume $1.7 billion of debt on the target firm's books.

Of the $9 billion purchase price, $700 million would be paid to Zain one year after closing the deal, the companies have said.

In Kuwait, Zain said its due diligence process was on schedule and that work on final deal documents could take place after its board meeting on Wednesday.

In a statement, Nabil bin Salama, CEO, said: "Executive management will present the latest develpments to the group's board at its meeting on Wednesday," adding that final documents for the deal would be prepared after getting the board's agreement.

On Friday, a source had told Reuters financing would be tied up in the next two days, and the Indian firm's board met on Saturday to discuss the deal.

Bharti has been hunting for emerging market assets as its home turf becomes fiercely competitive and call charges plummet in the world's fastest growing mobile market.

Standard Chartered Bank acted as the lead adviser for $7.5 billion of the financing, while Barclays acted as the joint lead adviser, Bharti said.

StanChart and Barclays are also Bharti's main advisers for the deal, sources have said.

Other banks participating in the jumbo financing include top Indian lender State Bank of India (SBI), ANZ, BNP, Bank of America Merrill Lynch, Credit Agricole CIB, DBS, HSBC, Bank of Tokyo Mitsubishi UFJ and Sumitomo Mitsui Banking Corp.

In addition to the dollar financing, SBI has committed up to $1 billion equivalent rupee loans which would cover any associated transaction costs, Bharti said.

It also said Global Investment House KSCC is serving as the regional financial adviser on the transaction. (Reuters)

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Taha 10 years ago

I hope Bharti succeeds in taking over and operate the firm efficiently. Zain as such has also failed to make any significant impact in Saudi Market. STC has been leading since the beginning with Mobily following it. Zain comes the last with not very attractive offers. Zain Saudi has to reconsider its strategy or face huge failure in its Saudi Venture. T