Bharti Airtel might be open to offering the chairman's post of the new merged entity to MTN group chairman M C Ramaphosa. Sunil Mittal would be deputy chairman and group CEO and MTN group CEO Phutomo Nhleko deputy group CEO, according to bankers close to the negotiations.
While a 'non-binding', 'non-definitive' and 'non-disclosure' agreement between MTN and Bharti Airtel is expected to be signed soon, there are key issues on foreign direct investment limits within India that might need to be addressed to complete the financial structuring of the company.
India does not allow more than 74 per cent direct foreign equity in a telecom company and Bharti already has Singtel with a direct and indirect stake of over 13 per cent directly (and over 30 per cent indirectly) apart from other foreign institutional investors.
With MTN raising its asking price, bankers said Bharti will have to pay for 50 per cent of the deal through cash and the rest through equity in Bharti Airtel. This means the foreign shareholding in the merged entity might go up substantially.
Bharti's initial proposal was for a 60:40
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