Fichier 287

Publications

Airtel arranges funds to acquire MTN

Airtel arranges funds to acquire MTN

Bharti Airtel is in talks to arrange funding for a potential takeover bid for MTN. The bid is estimated to cost around USD2bn, and Bharti is in discussions with foreign banks and investment banks to raise a bridge loan of nearly USD5bn. Standard Chartered Bank and Goldman Sachs have committed to provide a USD12bn bridge loan to Airtel. SingTel, which holds a stake in Airtel, has also agreed to infuse around USD5bn for the acquisition of a 26% stake in a yet-to-be-formed special purpose vehicle which will make the bid. If needed, Bharti will contribute around USD1-1.5 bn from its reserves to fund the overseas acquisition. Bharti's advisor Standard Chartered has sounded out almost all foreign banks and investment banks to raise the total bridge loan of around USD17bn. Bharti is considering several options to refinance the loan including issuing equity instruments in the domestic or the US market and a private placement of fresh Bharti shares to select investors including SingTel. Since Bharti plans to acquire only the majority stake in MTN and want it to continue as a listed entity, the acquisition will not be a leveraged buyout. Bankers said Bharti and its advisor are now giving final shape to the offer which may be announced shortly.