Bharti Airtel ties up financing for acquisition of Zain Africa

Telecom services provider Bharti Airtel Limited today said that the entire financing requirement of $ 8.3 billion for the proposed acquisition of Kuwait telecom company Zain's African unit, Zain Africa BV, had been successfully tied up.

The company said in a press release here that the financing was oversubscribed, with major international banks committing to underwrite the total amount.

It said that for $ 7.5 billion of financing, the company's Mandated Lead Manager (MLA) and Lead Advisor is Standard Chartered Bank, MLA and Joint Lead Advisor is Barclays, MLA and Lead Onshore Adviser is SBI Group and other MLAs and Co-Advisors are ANZ, BNP, Bank of America Merrill Lynch, Credit Agricole CIB, DBS, HSBC, Bank of Tokyo Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation.

In addition to the dollar financing, SBI Group have committed upto $ 1 billion equivalent rupees to Bharti, which would also cover any associated transaction costs, the release said.

Global Investment House KSCC is serving as Bharti's Regional Financial Advisor on this transaction, the release added.

Bharti had said in mid-February that the proposed acquisition, based on an enterprise value of $ 10.7 billion, was likely to result in a total payout of about $ 9 billion.

The amount included any loans payable by the operating compaies to Zain Group and was based on the estimated net debt of approximately $ 1.7 billion as on December 31, 2009, it had said.

On February 15, Bharti Airtel had said that it had agreed to enter into exclusive discussions until March 25, 2010 for the acquisition Zain Africa BV.

"This potential transaction does not include Zain’s operations in Morocco and Sudan and remains subject to due diligence, customary regulatory approvals and signing of final transaction documentation," it had said.

A day earlier, the Board of Zain had unanimously approved the sale of the group's assets in Africa to Bharti Airtel.

Bharti Airtel expects the deal would give it a foothold in an region that is still largely untapped and offers huge potential for growth.

The Indian company had on September 30 last year called off talks with South Africa's MTN for a planned alliance because the South African government had expressed its inability to accept the tie-up in the form it had been proposed.

If it had gone through, the transaction would have been the single largest Foreign Direct Investment (FDI) into South Africa and one of the largest outbound FDIs from India.

The two companies had entered into similar talks in 2008 but they had broken down over issues related to control of a merged entity.

In January this year, Bharti Airtel had agreed to buy 70 per cent of Bangladesh's Warid Telecom for an initial investment of $ 300 million.

It has also set up a new, empowered and dedicated International Business Group with Mr Manoj Kohli as CEO (International) and Joint Managing Director. Mr Kohli was earlier CEO (India and South Asia) and Joint Director of the company.

NNN