BUSINESS

Bharti Airtel ties up funds worth $8.3 bn for Zain

By BS Reporter
March 22, 2010 11:28 IST

Bharti Airtel said it had arranged the funds for its proposed acquisition of the African assets of Kuwait-based Zain Telecom.

This brings it a step closer to sealing the deal. It has arranged $8.3 billion (Rs 37,750 crore).

"The financing was oversubscribed, with major international banks committing to underwrite the total amount," Bharti said in a statement. Of the funds, $7.5 billion (34,072 crore) are in dollars and $1 billion (Rs 4,550 crore) in rupees.

The loans in rupees would cover any associated transaction costs. Standard Chartered Bank, State Bank of India and Barclays are the major contributors to this debt portfolio.

Bharti Airtel had earlier said Zain's enterprise value of $10.7 billion was likely to result in a payout of $9 billion (Rs 40,887 crore), which includes any loan payable by the operating companies to Zain Group, based on the estimated net debt of about $1.7 billion (Rs 7,723 crore) as on December 31, 2009.

Further, an amount of $700 million (Rs 3,180 crore) out of the total payable amount is to be paid a year after the deal's closure.

Bharti and Zain are in exclusive talks till March 25. This is the third attempt by Bharti Airtel to acquire assets in the African continent. Last year, the company had failed to acquire MTN of South Africa.

The board of Bharti Airtel had approved the proposed acquisition on Saturday. Executives from SingTel, which holds 31 per cent in Bharti Airtel, were present at the meeting.

If the deal with Zain goes through, it would have access to 42 million subscribers in 15 African countries.

BS Reporter in New Delhi
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