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Zain’s tussle with Econet not our concern, says Bharti Airtel

By Adekunle Adekoya, with agency reports
BIDDER for Zain Group’s Africa operations, Bharti Airtel of India has said that it was not concerned with the ownership tussle in Zain’s Nigeria operations with Econet Wireless, saying it was for Zain Group to settle.

This was disclosed in Barcelona yesterday on the sidelines of the Mobile World Congress which closes today by Bharti Airtel’s chairman, Sunil Mittal. Bharti is offering about $9 billion for Zain’s Africa unit of which Nigeria operations are key. The deal excludes Sudan and Morocco.

CEO of Econet Wireless, Strive Masiyiwa holds on to his firm’s equity in the mobile operator, saying in an interview in Johannesburg that “Zain Nigeria is not for sale.”

Officials at Zain declined comments yesterday, in light of litigations by another shareholder, Broad Communications.
Mittal said he’s “not hesitant at all” about the tussle, adding that “in the telecom world, litigations are not unusual.” By implication, Zain Group is obligated to reach a settlement with Econet Wireless before March 25 when both groups will meet for exclusive talks.

Mittal, who spoke in an interview with Bloomberg Television in Barcelona, said the Zain deal “is big, but very straight,” compared with its failed bid to acquire the MTN Group last year for $23 billion. Of that, Mittal said:

“I think the biggest lesson for us is that a deal can be one of two things: it can be big and needs to be simple, or it can be a complicated deal, but needs to be small. MTN was both big and complicated. Thankfully, this one is big, but very straight.”

The Zain deal has become crucial to Bharti, as it hopes to add about 42 million subscribers in 15 countries in Africa with the purchase. The financing of the transaction won’t be a problem, Mittal said.

“I can’t give you an assurance that this will not be financed through debt because the financial arrangements for this deal will be laid out in the coming days, or maybe a week or two,” he said. “Every time we go for an international acquisition or an attempt to make an acquisition, money is not a problem. The attempts to buy MTN were backed by loans of “tens of billions of dollars,” he said.

If the deal sails through, Bharti will be assuming a debt of $1.7 billion at Zain’s African operations, and negotiations have reached an advanced stage, with Mittal disclosing that “we’re currently in the due-diligence process.”
Bharti Airtel is India’s largest mobile-phone company, and is making its third attempt to enter the continent.

Slowing sales at home have spurred Bharti to seek access to faster-growing markets. However, since news of the impending deal with Zain hit the financial markets last Monday, its shares have fallen 11.2 percent on the Mumbai bourse.

But Mittal shook this off, saying “Every time someone makes an acquisition, the stock almost always goes down,” he said, and added that some of the share price decline can be attributed to investors’ lack of information on the deal, adding that details will be provided in the coming days.


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