Bharti draws funds to acquire Zain African assets

www.WirelessFederation.com/news: Bharti Airtel, India’s largest telco by both customers and revenues has started drawing down funds from lenders for completing its buy of Kuwaiti telecom Zain’s African assets in a $9-billion deal. The deal to acquire Zain Telecom’s African business is expected to be completed by the Indian telecom operator soon.

Bharti Airtel signed a deal with Kuwait-based Zain Telecom in March to buy its African business for $10.7 billion, consummation of which will transform Bharti into a truly global telecom company with operations across 18 countries. Bharti Airtel would also get a firm foothold in the relatively untapped African market through this deal.

Currently, Bharti Airtel is in the process of getting approval from each of the 15 African nations where Zain operates in the continent and has been successful in getting them except in Sudan and Morocco.

The deal worth $10.7-billion had been signed in Amsterdam, the base of Zain’s African unit on March 30 and included $1.7 billion of Zain’s debt in the total amount. Bharti Airtel will have over 180 million subscribers after acquiring Zain Africa’s 42 million customers, thus becoming the world’s fifth-largest mobile phone operator.

Bharti Airtel had announced just days before singing the deal with Zain that it had finalized $8.5 billion of funding for its acquisition of the African assets of Zain. According to the company, consortium of banks led by Standard Chartered and Barclays would lend it $7.5 billion and State Bank of India will bring in another $1 billion, the latter a so-called rupee loan.

The largest chunk of funding of $1.5 billion of which $500 million is a dollar loan has been provided by India’s largest bank, State Bank of India.  The lead arranger for the dollar loan is Standard Chartered that will lend $1.3 billion while Barclays the joint lead advisor will provide $900 million. The remaining $4.8 billion will be provided by a group of eight international banks.