We intend to close MTN deal this time: Bharti

May 30th, 2009 - 6:00 pm ICT by IANS  

Amritsar, May 30 (IANS) The Bharti group Saturday expressed confidence that it will seal the proposed $23-billion deal with South African telecom giant MTN, after restarting negotiations that had collapsed last year.
The two groups are discussing options under which Bharti will acquire 49-percent stake in MTN and the South African company, along with its shareholders, will buy 36-percent equity in the Indian company, the two firms had announced May 25.

“The talks are on. This time we intend to close the deal,” said Bharti Enterprises vice chairman and managing director Rajan Bharti Mittal.

Funds for the deal will be a mix of debt and internal accruals, Mittal told reporters here after inaugurating a cash-and-carry store set up in partnership with US retailer Wal-Mart.

Bharti had ended its talks with MTN last year, rejecting a proposal that would have made the Indian firm a subsidiary of the South African group. Following that, MTN started negotiations with the Reliance Anil Dhirubhai Ambani Group, which also failed.

Bharti and MTN have agreed to discuss the potential transaction exclusively with one another till July 31.

Bharti chairman Sunil Mittal had earlier said the transaction presented advantages for both groups, including cost savings through economies of scale.

Potential transaction between Bharti and MTN will create a leading telecom service provider group, aligning Bharti’s market-leading Indian business with MTN’s market-leading African and Middle Eastern operations

Both Bharti and MTN have over 100 million subscribers and the deal will make the combined entity among the top five telecom service companies in the world, with annual revenues of $20 billion.

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