India’s largest telecom player has finalised the deal with the Kuwaiti firm; funds for financing the acquisition have been arranged
Telecom major Bharti has clinched a $10.70- billion deal to acquire the African operations of Kuwaiti firm Zain, which today announced that "definitive agreements" would be signed soon, reports PTI.
"The Board is pleased to report that due diligence process has been completed and the parties are finalising definitive agreements, which are expected to be signed in the coming days," Zain said in a statement a day after its Board meeting.
Bharti, which had announced on Sunday the tying up of $8.30 billion for upfront payment, did not comment immediately, though sources said that top officials have flown to Kuwait to work out the details.
The money for funding the buy has been arranged from a clutch of foreign banks and the State Bank of India with Standard Chartered Bank committing the highest amount of $1.30 billion followed by $0.9 billion from Barclays.
In all, $7.5 billion debt would be dollar-denominated and the remaining $1 billion will be in a rupee loan from SBI.
Having failed twice to acquire another South African giant MTN in the past two years, Bharti had been continuously looking for global acquisitions. Zain's Board reviewed the "latest developments and negotiations" on 24th March, the last day of the exclusive agreement for negotiations.
"Upon signing (the agreements), the parties will move towards getting any required approval," the statement said, while taking cognisance of the reports that Bharti has already secured the entire financing requirement of $8.3 billion for the transaction.
The sale of Zain Africa BV would not include Zain's operations in Sudan and Zain's investment in Morocco, the statement said.
Bharti would have to pay another $700 million after a year besides taking the loan liability of $1.70 billion of the acquired company after it signs the deal.
With the acquisition, Bharti Airtel will enter the world's fastest growing market in Africa. The two businesses combined will have more than 165 million subscribers with total revenue of $13 billion.