Bharti says aims to conclude Zain deal by late April

22 Feb 2010

NEW DELHI: Bharti Airtel is aiming to conclude its planned purchase of the African assets of Zain telecom by late April, it was reported, as the Indian company's chief defended the deal.

Bharti says aims to conclude Zain deal by late April

Bharti Airtel, India's top mobile phone company, and Kuwait's Zain said last Monday they would hold talks until March 25 to work out details of the proposed US$10.7 billion deal giving the Indian firm access to markets in 15 African nations.

"Everything is on a pretty fast track," Sunil Bharti Mittal, chairman of Bharti Airtel, told India's CNBC TV18 network, calling the proposed takeover "a great opportunity" for the Indian company.

"If we can complete our positioning on the deal on (March) 25th... then you should just await country approvals," Mittal said. "My guess is that by the end of April, we should be looking good (for closure of the deal)."

"This deal has no complications," he said.

Mittal's remarks came after shares in Bharti Airtel plunged 12% in a week following the announcement of the offer, closing Friday at 278.25 rupees.

Analysts have expressed worries that debt for funding the purchase could put pressure on Bharti's balance sheet and that it was overpaying for poorly performing assets.

Late Friday, global ratings agency Standard & Poor's placed Bharti on "creditwatch with negative implications," warning its finances could be strained by debt to fund the deal and by the weak earnings of Zain's African operations.

But Mittal insisted Bharti can turn around Zain's African assets and the debt would be raised on "very favourable terms."

"Everybody is keen to fund this (deal)," said Mittal, especially as Bharti's balance sheet is currently debt-free.

"Funding is likely to be available on very, very good terms," he said.

The company's Zain bid, dubbed by the media "Bharti's African safari", is part of its drive to keep up growth momentum alongside its rapid push into rural India, as the urban mobile markets become saturated.

Mittal, who has failed twice in attempts to tie up with South African flagship MTN, said the proposed takeover holds great promise for Bharti as sub-Saharan Africa represents "the most underpenetrated (telecom) market in the world."

Source: AFP