India’s Bharti Airtel has reportedly been successful in securing around US$5 billion in bank loans to fund its planned merger with South Africa’s MTN, raising expectations that the deal could be completed before the latest 30 September deadline. According to the Financial Times, Bharti has secured around US$3.5 billion in US dollar funding from foreign banks and around US$1.5 billion in Indian rupee equivalent funding from local Indian banks to help fund its purchase of MTN shares. The loans are in line with earlier reports. Banks signing up to the dollar portion include ANZ, Barclays Capital, BNP Paribas, Citigroup, DBS, Mitsubishi UFJ Financial Group and Standard Chartered. State Bank of India and Kotak are providing the rupee funding. Separate reports suggest that MTN could also be close to securing funding for its part of the merger.
Last week, the two operators agreed to extend the exclusivity period for talks by another month to 30 September, noting that “no decision or agreement to acquire any shares or implement the potential transaction outlined” had been agreed. It was the second time that the deadline was extended. However, the Financial Times notes that – with the funding now in place – the deal could close early next month. According to the original merger plans, Bharti will acquire a 49 percent shareholding in MTN, while MTN and its shareholders would acquire an approximate 36 percent stake in Bharti, of which 25 percent would be held by MTN with the remainder held directly by its shareholders. The US$23 billion deal would create a telecoms group with combined revenues of over US$20 billion and a customer base of over 200 million (creating the world’s third-largest mobile operator), which would combine Bharti’s market-leading Indian business with MTN’s various business units across Africa and the Middle East.