In its board meeting on Wednesday, Kuwait-based Zain Telecom is understood to have approved the proposal of selling African assets to India’s largest private sector telecom company led by Sunil Mittal.
Bharti Airtel is likely to seal the $10.7-billion deal in a day or two to acquire the African assets of Kuwait-based Zain Telecom, whose board is understood to have cleared the transaction.
“Due diligence is going on till the last minute to see nothing is left to chance... but things are moving in the right direction,” a source said.
In its board meeting on Wednesday, Zain is understood to have approved the proposal of selling African assets to India’s largest private sector telecom company led by Sunil Mittal.
However, there was no official confirmation of this from Zain.
The deal paves the way for one of the largest telecom cross-border deals which will give Bharti access to 15 African countries at one go.
The exclusive talks between Bharti and Zain are till March 25. Mr. Mittal had earlier said he saw the deal being finalised in April.
Bharti is keen on entering the African market. In the past two years, it has twice attempted a merger with South Africa-based MTN. The efforts, however, did not succeed due to structural issues.
Bharti Airtel on March 21 announced tying up of $8.3 billion debt for the proposed acquisition which was over-subscribed with major international banks committing to underwrite the total amount.
Once the formal announcement comes, Sunil Mittal’s Airtel will enter the world’s fastest growing markets in Africa. The two businesses combine will have more than 165 million subscribers with total revenue of $13 billion.
Mr. Mittal, however, may face challenges turning round Zain’s under-performing networks, particularly in Nigeria, the Kuwaiti company’s most important market.
Zain faces a legal suit from Econet Wireless, a South African telecom company, which is opposing the sale of Zain’s Nigerian operations to Bharti.
Econet was a shareholder in Vee Networks, now called Zain Nigeria, and claims it had first refusal over any shares in the Nigerian company when it was acquired by Celtel in 2006 — another African telecom which was itself subsequently bought by Zain. Bharti has termed the issue as ‘Seller’s issue’
In addition to the dollar financing, the SBI Group has committed up to $1 billion in rupee loan to Bharti, the company said.