1
Listing of Bharti Airtel-MTN combined entity in India & South Africa on 31st July 2009, 10:49 am
Club Exe
CSoC Super Master
Sunil Mittal, chairman and group CEO of Bharti Enterprises, is in talks with government officials to clear regulatory issues over listing of the Bharti Airtel-MTN combined entity in India as well as South Africa in case the negotiations between the two telcos eventually lead to a full merger.
India’s largest mobile operator Bharti Airtel and Africa’s top telecom service provider MTN are engaged in a second round of exclusive talks for a merger deal estimated to be worth $23 billion.
Mr Mittal has met a number of senior officials including finance secretary Ashok Chawla, a finance ministry official said on condition of anonymity.
The existing regulatory regime does not provide for listing of shares of Indian companies on stock exchanges outside the country. They can only list Global and American depository receipts, holders of which do not have all the rights of a common shareholder.
The new proposed Companies Act too has not made any provisions on dual listing.This has prompted Mr Mittal to seek the finance ministry's intervention in the matter, the official said.
Bharti Airtel declined to comment on the issue. The hitch over dual listing, however, is unlikely to hamper the proposed deal, which is a cross-border merger of a kind not executed in India earlier.
The finance ministry has already indicated that there is no violation of current foreign investment policy if the deal goes through. But problems could arise later, and Mr Mittal is clearly moveing forestall any such eventuality.
This is because the next logical move could be to merge the two firms for full synergy, starting with an operational merger.
At that stage India’s regulations, which do not currently envisage dual listing, could prove to be a problem. It may take a couple of years for a full merger but when that happens, the government must provide clarity in terms of regulations governing profit, taxation, computing operating costs and so on, said the official. This is because the combined entity is very likely to be listed in both countries and would be subject to national regulations in both.
The government had earlier sought clarifications on the deal from Bharti. Talks between the two companies are said to be at an advanced stage and it is expected that they will extend the exclusive discussions, due to end on July 31.
The deal is expected to result in MTN and its shareholders getting 36% economic interest in Bharti and the Indian company ending up with 49% in MTN.
Meanwhile, corporate affairs minister Salman Khurshid on Thursday said in a written reply to a question in Parliament that the Bharti-MTN deal had not been finalised or signed yet. The minister said any change in the equity holding of the company would require government approval. Bharti and MTN have entered into the second round of merger talks this May, a year after the first round of talks failed.
The merged entity would have 200 million customers covering the Middle East too, apart from India and Africa.
http://economictimes.indiatimes.com/Mittal-in-talks-with-govt-for-listing-Bharti-Airtel-MTN/articleshow/4839939.cms
India’s largest mobile operator Bharti Airtel and Africa’s top telecom service provider MTN are engaged in a second round of exclusive talks for a merger deal estimated to be worth $23 billion.
Mr Mittal has met a number of senior officials including finance secretary Ashok Chawla, a finance ministry official said on condition of anonymity.
The existing regulatory regime does not provide for listing of shares of Indian companies on stock exchanges outside the country. They can only list Global and American depository receipts, holders of which do not have all the rights of a common shareholder.
The new proposed Companies Act too has not made any provisions on dual listing.This has prompted Mr Mittal to seek the finance ministry's intervention in the matter, the official said.
Bharti Airtel declined to comment on the issue. The hitch over dual listing, however, is unlikely to hamper the proposed deal, which is a cross-border merger of a kind not executed in India earlier.
The finance ministry has already indicated that there is no violation of current foreign investment policy if the deal goes through. But problems could arise later, and Mr Mittal is clearly moveing forestall any such eventuality.
This is because the next logical move could be to merge the two firms for full synergy, starting with an operational merger.
At that stage India’s regulations, which do not currently envisage dual listing, could prove to be a problem. It may take a couple of years for a full merger but when that happens, the government must provide clarity in terms of regulations governing profit, taxation, computing operating costs and so on, said the official. This is because the combined entity is very likely to be listed in both countries and would be subject to national regulations in both.
The government had earlier sought clarifications on the deal from Bharti. Talks between the two companies are said to be at an advanced stage and it is expected that they will extend the exclusive discussions, due to end on July 31.
The deal is expected to result in MTN and its shareholders getting 36% economic interest in Bharti and the Indian company ending up with 49% in MTN.
Meanwhile, corporate affairs minister Salman Khurshid on Thursday said in a written reply to a question in Parliament that the Bharti-MTN deal had not been finalised or signed yet. The minister said any change in the equity holding of the company would require government approval. Bharti and MTN have entered into the second round of merger talks this May, a year after the first round of talks failed.
The merged entity would have 200 million customers covering the Middle East too, apart from India and Africa.
http://economictimes.indiatimes.com/Mittal-in-talks-with-govt-for-listing-Bharti-Airtel-MTN/articleshow/4839939.cms
