Bharti board to meet as $9 billion Zain deal nears

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Bharti board to meet as $9 billion Zain deal nears

Bharti Airtel's board will on Saturday discuss its USD 9 billion bid for Kuwaiti telecom group Zain's African units, a source said, and the two sides may clinch a deal next week.

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Bharti Airtel 's board will on Saturday discuss its USD 9 billion bid for Kuwaiti telecom group Zain's African units, a source said, and the two sides may clinch a deal next week.

The exclusive talks between billionaire Sunil Mittal's telecom group and Zain expire on March 25, marking the third time it has tried to get its hands on a meaningful African business after two failed bids for South-Africa's MTN.

"Currently Bharti is aiming to meet the March 25 deadline, but there could be a slippage of a day or two. Tomorrow's board meet is crucial," said a source with direct knowledge of the matter.

Financing details were likely to be finalised in the next two days, the source said.

Bharti has been hunting for emerging market assets as its home turf becomes fiercely competitive and call charges plummet in the world's fastest growing mobile market.

The two sides also look to have cleared a potential stumbling block over ownership of Zain's assets in Nigeria, of which it holds 65%.

Bharti might put part of the purchase price in an escrow account to protect it from potential problems, the source said, such as that in Nigeria. The unit is a crown jewel, without which Bharti would not close the deal.

Bharti and Zain have said USD 700 million of the purchase price would be paid a year after the completion of the deal, and the source said part of it would be put in the escrow account.

"The due diligence has been conducted quite speedily. So if something works out negatively, the money can be adjusted against that," the source said, referring to the money likely to be put in the escrow account.

"No major issues have emerged in the due diligence apart from Nigeria," he said.

A spokesman for Bharti, which is conducting a due diligence assessment of the Zain assets, declined to comment on the board meeting and the possible setting up of an escrow account.

Banking sources said Bharti is aiming to raise up to USD 8.5 billion in offshore loans to fund the deal and has issued a term sheet to banks.