Bharti Airtel will finance its $10.7bn (£6.78bn) bid for Kuwaiti telecom firm Zain’s African assets with foreign currency loans.
India’s top mobile operator is believed to be in talks with Standard Chartered, Barclays, State Bank of India, Goldman Sachs and Nomura to secure funding. State Bank of India had already agreed to provide $2bn in loans to Bharti during its failed merger talks with South Africa’s MTN Group. Barclays and Standard Chartered are advising.
The deal, which will see negotiations continue until 25 March, would see Bharti snap up Zain’s operations in 15 countries. It includes taking on Zain’s debts of around $1.7bn and would defer payment of an estimated $700m until a year after the deal closes. The total payout would include loans payable to Zain.
Bharti shares closed 4.5 per cent lower yesterday, extending losses for a second day after a 9.2 per cent fall in the previous session. Concerns have been raised that the huge debt burden to finance the deal could stretch its balance sheet.
BNP Paribas Securities yesterday cut its rating on Bharti shares from “buy” to “hold”.
Zain plans to pocket about half of the proceeds of the proposed $10.7bn sale and use the rest to pay off loans.
STANDARD Chartered recently advised Tullow Oil when it secured its $250m debt funding facility. The deal was closed in December. Also advising were Bank of Scotland, BNP Paribas, Calyon, ING Bank, SociОtО GОnОrale and The Royal Bank of Scotland. The deal allowed the company to provide additional funding to its extensive range of capital programmes.
It took a major role in the $631m refinancing facility for Korean Gas Company (KOGAS), the world’s largest importer of liquefied natural gas. It played a leading role in advising both the senior and junior tranches of the refinancing.
The bank spearheaded the $1.8bn private equity deal that gave Kohlberg Kravis Roberts (KKR) control of South Korea’s second-biggest beer producer, Oriental Brewery. They advised on the purchase from Anheuser-Busch InBev, the heavily indebted Belgian brewer. The deal was Korea’s biggest buyout by private equity, and one of the largest in Asia, since 2006.