Bharti ties up Zain deal funds as talks deadline nears

RELATED NEWS Bharti board to meet as $9 billion Zain deal nears

Top telecoms firm Bharti Airtel said it had tied up the entire financing requirement of USD 8.3 billion for its planned buy of Kuwaiti telecom Zain's African assets, in a sign of progress as the deadline for the firms' talks expire next week.

Bharti and Zain are in exclusive talks until March 25, marking the third time the Indian firm has tried to get its hands on a meaningful African business after two failed bids for South Africa's MTN.

Bharti said in a statement on Sunday the financing, which would be the largest acquisition loan for an Indian borrower, was oversubscribed, with major international banks committing to underwrite the total amount.

"I think such a statement at such a time makes one quite hopeful that they would be able to clinch a deal by the deadline," said RK Gupta, managing director at Taurus Asset Management in New Delhi.

"This puts Bharti on a strong footing, one step closer to conclude the deal."

Bharti would pay a total USD 9 billion for acquiring Zain's assets in 15 African countries, and will also assume USD 1.7 billion of debt on the target firm's books. Of the USD 9 billion purchase price, USD 700 million would be paid to Zain one year after closing the deal, the companies have said.

On Friday, a source had told Reuters financing would be tied up in the next two days, and the Indian firm's board met on Saturday to discuss the deal.

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.

BANKS LINE UP

Standard Chartered Bank acted as the lead advisor for USD 7.5 billion of the financing, while Barclays acted as the joint lead advisor, Bharti said.

StanChart and Barclays are also Bharti's main advisors for the deal, sources have said.

Other banks participating in the jumbo financing include top Indian lender State Bank of India (SBI), ANZ, BNP, Bank of America Merrill Lynch, Credit Agricole CIB, DBS, HSBC, Bank of Tokyo Mitsubishi UFJ and Sumitomo Mitsui Banking Corp.

In addition to the dollar financing, SBI has committed upto USD 1 billion equivalent rupee loans which would cover any associated transaction costs, Bharti said.

It also said Global Investment House KSCC is serving as the regional financial advisor on the transaction.