No twin listing request on Bharti-MTN deal, says Govt

Sebi & RBI discuss regulatory matters related to the telecom deal

Union Finance Secretary Ashok Chawla.

“There is no formal proposal (for dual listing from either of Bharti Airtel or MTN) before any public authority in India as of Tuesday,” Finance Secretary Ashok Chawla told reporter here.

“Our officials had a discussion with them. They explained our legal position on issues (having a bearing on the proposed tie-up). They had asked them what they (Bharti Airtel and MTN) needed,” he said.
Bharti Airtel and MTN are currently engaged in exclusive talks for a possible merger deal involving cash and share-swap to create the world’s third largest telecom operator with over 200 million subscribers.

The period of exclusive talks between Bharti and MTN is due to end on Wednesday.
Prime Minister Manmohan Singh has assured South Africa that there would be no “discrimination” against the proposed $23 billion merger deal between Bharti and MTN, facing the hurdle of dual listing.The proposed deal has run into manifold hurdles. Finance Minister Pranab Mukherjee has said that Bharti-MTN dual listing is linked to full convertibility of the rupee and the finance ministry is looking into legal issues of the deal.

Existing laws
Mukherjee said that the government would welcome the deal but it should be in the context of existing laws of the land.

Commerce Minister Anand Sharma has expressed similar views indicating that dual listing as sought by the South African firm would not be possible as it would need a policy change on the full convertibility of rupee. Last week Bharti Chairman Sunil Mittal met the Prime Minister Manmohan Singh and was understood to have discussed contentious issue like dual listing and exemption from open offer to be availed by MTN.
Likewise, a group of officials from the National Treasury and South African Reserve Bank (SARB) had a meeting with officials from the  Ministry of Finance, Sebi and the RBI and were understood to have  discussed regulatory matters related to the deal.
Under the announced scheme of Bharti-MTN deal, Bharti Airtel is to acquire 49 per cent economic interest in MTN. In return, MTN will acquire 25 per cent economic interest in Bharti Airtel for 2.9 billion dollars and MTN shareholders will acquire another 11 per cent. For conclusion of the deal the MTN is insisting for dual listing.

Under dual listing securities are listed on more than one exchange for the purpose of adding liquidity to the shares and offering investors a choice on where they want to trade. The revised takeover norms, announced recently by the Securities and Exchange Board of India (SEBI), may also have major ramification on the fate of proposed Bharti-MTN deal.

Sebi has revised takeover norms by bringing American Depository Receipts (ADRs)/ Global Depository Receipts (GDRs) with voting rights on par with domestic shares, which makes an open offer mandatory if 15 per cent stake is bought in a company through these securities. MTN is South Africa’s largest telecom company with over 103 million subscribers in 21 countries.

No hint of Bharti extending talks
Bharti Airtel and MTN of South Africa are likely to extend the exclusive talks period beyond September 30 in the absence of clarity on the proposed US$23 billion deal between the two companies.

The period for exclusive talks between Bharti and MTN is ending on Wednesday. There is no confirmation from Bharti or MTN on whether the talks would be extended or not.
The government also said it has not received any proposal from either Bharti or MTN.

Govt postive on deal, says FM
The government, on Tuesday, said it has a positive approach towards the proposed US$23 billion deal between Bharti and South African MTN.
“Both Prime Minister Manmohan Singh and myself have said that we are taking a positive approach and outlook towards it,” Finance Minister Pranab Mukherjee told reporters on sidelines of a book release function here.

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