Stop Bharti-mtn Talks, Ban Airtel From Govt: Left Leader Abani To Pm

[savramesh 37]

Source

Abani Roy, the inveterate letter writer on corporate affairs, has done it again — this time turning his own and his party’s stand on its head.

The Rajya Sabha MP of the Revolutionary Socialist Party (RSP) has written to Prime Minister Manmohan Singh asking him to stop the proposed merger of Bharti Airtel with South African telecom giant MTN. Not just that.

He has “urged” the PM to stop all “Government functionaries” from using Airtel mobile services.

His reason: MTN has a significant market share in countries that face US sanctions — Sudan, Iran, Syria and Ivory Coast. This, from a man who — echoing the Left stand — has always been critical of US sanctions, has slammed Washington’s policy toward Tehran and criticised New Delhi for its stand against Iran at the IAEA.

This time, however, Roy uses US sanctions to support his claim that the proposed deal will compromise India’s “national security”.

In his three-page letter addressed to the Prime Minister sent late last month, with copies to the Finance and Commerce Ministers, Roy claims the proposed Bharti and MTN “will be a serious threat to national integrity and security...(and), in no circumstance, such merger be allowed.” He adds: “Government should direct the Government functionaries to stop immediately the use of Airtel mobile and Bharti’s other telecom services.”

MTN-Bharati talks come after failed negotiations between Anil Ambani’s Reliance Communications and MTN.

“Discussions (with Bharti) are still in progress,” MTN said in a statement to Johannesburg’s stock exchange earlier this week. On May 25, in a statement, it said the companies would hold exclusive talks until July 31. If it goes through, the MTN-Bharti deal will create the world’s third-largest mobile firm with over 200 million subscribers. MTN and its shareholders would take a 36 per cent stake in Bharti which would hold 49 percent of MTN.

When asked why he had sent the letter, Roy said: “I have the country’s security interests in mind. Mobile phones and Internet are being increasingly used by terrorists. So when an Indian telecom company enters into a deal with a foreign player, the Government should keep the security aspect in mind.”

So why didn’t he write the letter when Reliance Communications was in talks with MTN?

“I came to know of the deal only now. I am not saying don’t give the deal to Bharti, I am only highlighting the security aspect.”

In his letter, Roy claims that MTN’s presence in India will be a “threat to national security” as many of “the key national leaders, Ministers, MPs, Government officers, including those holding sensitive positions, use Airtel.”

Roy has a curious track record of sending letters to various Ministers on corporate matters. Once, he wanted the security approval given to Jet Airways chief Naresh Goyal revisited; he favoured Reliance Infocomm’s proposal to pay lower royalty to Qualcomm and even sought a probe into the assets of a former Union Finance Secretary.

Recently, he wrote a letter to the PM seeking the resignation of Mendu Rammohan Rao, a former independent director on the board of Satyam Computers, from various government committees. Rao was a member of government panels to select the chairman and members of SEBI, the chairman of the Telecom Regulatory Authority of India and the deputy governor of the Reserve Bank of India.

[KumaarShah 143]

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VERY INTERESTING NO, ALL THIS POLITICS????? Is Abani related to Ambani - only the 'm' is mising!!!!

[savramesh 37]

Will Bharti Airtel, MTN ring in a deal finally, or talk some more?

Source

Four possible scenarios in deal for world's third largest telecom services provider with at least 200 mn customers New Delhi: With exclusive talks for a proposed $23 billion (around Rs1.1 trillion) merger of Bharti Airtel Ltd and South Africa's MTN Group Ltd set to conclude on Friday, Mint lays out possible scenarios that may unfold.

A merger would result in the creation of the world's third largest telecom firm, with more than 200 million customers and $20 billion of annual revenue.

New Delhi-based Bharti would acquire 49% of MTN after Johannesburg-based MTN pays cash and stock for an effective 36% stake in India's largest telecom operator. The stake swaps would eventually lead to a full merger, the two companies have said.

In order for Bharti Airtel to acquire the 49% stake in MTN Group, it would have to pay some $6.8 billion, at 86 rand (Rs532.45) per MTN share. Bharti would see an inflow of $2.9 billion from MTN Group as part payment for the purchase of a 36% economic interest in Bharti post-transaction.

For Bharti, the net cash outflow required would be some $3.9 billion, part of which it would fund with its $1 billion cashpile.

As part of the deal, Bharti shares would be listed on the Johannesburg Stock Exchange. On Indian bourses, the shares would be renamed Bharti-MTN.

The Securities and Exchange Board of India, or Sebi, India's capital markets regulator, said earlier this month that MTN could acquire the 36% stake in Bharti through global depositary receipts, or GDRs, without triggering a mandatory open offer as the GDRs would not come with voting rights.

An open offer is needed only when the GDRs are converted into equity shares with voting rights.

Scenario 1: The talks are called off. Little possibility.

Analysts say there is very little chance that the firms will call off the talks because both have applied for funding to meet the financial obligations that would result from a merger.

"There would be probably a significant foreclosure fee that they would have to pay if they don't take the loans now," said Kevin Trindade, a senior analyst with Mumbai based K.R. Choksey Shares and Securities Pvt. Ltd. "I expect that there will be an amicable settlement."

Bharti has reportedly held talks with banks including Standard Chartered Plc., JPMorgan Chase and Co., Barclays Plc. and State Bank of India to raise about $4 billion, while MTN has held talks with a group of lenders to secure a $3.5 billion syndicated loan.

Scenario 2: The talks are extended. Most probable outcome.

Azmi Mikati, chief executive of the M1 Group that's one of the largest shareholders in MTN, has said that the talks would "most probably" be extended to the end of August as the deal was a complex one involving multiple jurisdictions, Reuters reported on Tuesday.

The Lebanese Mikati family controls about 10% of MTN through the M1 Group. Mikati is also a non-executive member of MTN's board.

"I doubt they will abandon the deal altogether but the likelihood of an extension is most probable," said Kunal Bajaj, a director at BDA Connect, a corporate advisory firm.

"I think there will be an announcement for an extension in talks, but only by a couple of weeksnot more than three weeks," a Mumbai-based analyst at an international brokerage firm said. He declined to be named because he is not authorized to speak to the media.

Scenario 3: Bharti and MTN change the contours of the deal. Another likely outcome.

With many MTN shareholders complaining that the price is not high enough, the deal may have to be sweetened to appease them, some analysts say. "To a shareholder, money matters. Since Bharti needs the approval of 75% of MTN shareholders, they may need to raise the cash per share ratio," the Mumbai-based analyst said.

Singapore Telecommunications Ltd, or Singtel, one of the largest shareholders in Bharti, will see a dilution of its stake in the Indian firm by 11 percentage points to around 19% in the event of a merger. To maintain its shareholding, Singtel may look at buying Bharti GDRs from MTN shareholders after a deal between Bharti and MTN is announced.

"Singtel may buy the GDRs at a 5-10% premium in order to sweeten the deal (for MTN shareholders) and try to keep its shareholding in Bharti at a certain level," said the analyst.

Scenario 4: An eleventh-hour deal happens before the deadline lapses. Unlikely.

Bharti and MTN Group are yet to reach agreement on a proposed merger, corporate affairs minister Salman Khursheed said on Thursday, one day before the deadline lapses. Bharti has to seek the government's approval as and when any change is proposed in its equity shareholding,

Bharti needs approval from the Foreign Investment Promotion Boardas the transaction involves a share swap and the issuance of GDRsas well as the department of telecommunications.

MTN needs approval by at least 75% of MTN shareholders as well as approval from the South African telecom regulator, the central bank, and the stock exchange.

"In all likelihood there will be an announcement tomorrow that the firms are extending the deadline for the talks," BDA Connect's Bajaj said.

When the deal happens, both firms stand to benefit. A report by HSBC Seurities and Capital Markets (India) Pvt. Ltd estimates capital expenditure savings at as much as $5 billion over the next five years. The absence of a vendor base in Africa should make it easy for Bharti-MTN in a post-deal scenario to enter into single contracts for equipment with vendors and benefit from cheaper rates in both markets for so-called third-generation mobile phone services in India and voice telephony in Africa.

Edited July 31, 2009 by savramesh

[savramesh 37]

Update on Airtel-MTN talks this week; MTN board meet on Aug 18

Source

NEW DELHI: Bharti Airtel and South Africa's MTN are likely to announce the status this week of the proposed merger to create a USD 23-billion entity as period for exclusive talks between them expired on July 31.

The telecom majors could not come to any conclusion in their exclusive talks, started on May 25 for a possible share swap deal between the two firms, said market sources.

Recently Corporate Affairs Minister Salman Khursheed had said that any proposal to change the equity shareholding of the company would require the government's approval. Bharti Airtel officials remained tight-lipped on whether the deal was on and the period would be extended or whether talks had collapsed.

Neither Bharti nor MTN issued a statement about the present status of the dialogue. Sources said MTN board may meet on August 18 to discuss the emerging situation. An email questionnaire sent to MTN remained unanswered.

Sidhharth Behura, Secretary in the Department of Telecom, had maintained that there is no deal as yet, so there is no question of seeking any information from them. And also they do not require any approvals for FDI up to 74 per cent.

Analysts said the silence of the firms so far indicates the negotiations are hitting some points of disagreement.

[savramesh 37]

Bharti Airtel declines on MTN deal delay

Source

Bharti Airtel declined 2.5% to Rs 374. Around 3.67 million shares changed hands at the counter today,which is three-fold increase as against its two-week average traded quantity of 1.07 million shares. The scrip touched a high of Rs 391 and a low of Rs 365 on the BSE.

Bharti Airtel has slipped today morning amid concerns over the Bharti-MTN deals. According to reports, the company is working on a revised offer for a deal with the South African company.

The stock opened at Rs 384, touched a high of Rs 391 and slipped to Rs 366. The scrip is now at Rs 371, down 3.5% from the previous close. The stock has slipped 53% in a month's time. Around 494,626 shares have been traded on the BSE so far.

This deal will involve huge amount of cash withdrawal and additional debt to be collected in order to facilitate funding the transaction. There has still been no certainty about the closure of the deal. Bharti Airtel is in talks with the South African company for a deal to create a $23 billion telecom entity.