Bharti, MTN to see $6.9 b additional debt after deal

“Under the current terms as presented to the market, it could result in additional net debt of $4 billion at Bharti and $2.9 billion at MTN,” Fitch said in its report but noted that it would wait for finalisation of the transaction before taking any rating action on the two firms.
Regulatory hurdles
Fitch said that it would closely monitor developments and was taking “note of the strategic merits of a potential partnership between Bharti and MTN, as well as the positive impact on their respective business risk profiles in terms of diversification and enhanced scale.”
“Nevertheless given the early stages of the discussions, potential regulatory hurdles and other associated uncertainties surrounding the transaction, Fitch will await finalisation of the transaction structure before taking any formal rating action,” it added.
Late last month, Bharti Airtel and MTN disclosed commencement of exclusive discussions to potentially acquire stakes in each other and eventually achieve a full merger. This is the second attempt by the two companies for a potential deal after their talks failed in May last year.
At that time, Bharti Airtel had said that it was pulling out of the talks as MTN was proposing a deal that varied from their earlier proposed structure.
Bharti had also disagreed to the proposal for making it a subsidiary of the South African company as part of the deal.

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