By IANS,
New Delhi: The Indian government is “positive” about the outcome of the much-awaited $23-billion Bharti-MTN telecom equity swap cum strategic alliance, Finance Minister Pranab Mukherjee said here Tuesday.
“Both PM (Prime Minister Manmohan Singh) and I have very positive outlook towards the deal. We have discussed it,” Mukherjee told reporters on the sidelines of the launch of a book by Arvind Virmani, chief economic advisor in the finance ministry.
Bharti and MTN have till Wednesday to wrap up the deal.
Asked whether the government had been approached by the South African government, the minister said: “You know it. We are on it.”
MTN needs the South African government’s nod to go ahead with the deal; the state-owned Public Investment Corp (PIC) holds about 20 percent stake in the company.
The two companies have been in talks since May 25 – after they had ended talks last year, with the Indian telecom major rejecting the proposal that would have made it a subsidiary of MTN.
The Indian government has given a green signal to the merger with the prime minister promising full support.
“I did mention this to President (Jacob) Zuma. I sincerely hope this deal goes through,” Manmohan Singh said at a press conference in Pittsburgh Friday night when asked if he had taken up the matter with the South African leadership.
“I hope Indian companies will not be subjected to any discriminatory treatment,” he said in reference to the regulatory roadblocks, both in India and South Africa, that have emerged in way of the deal.
The South Africans want dual listing of Bharti-MTN shares for the deal between the telecom firms to go through, while India does not permit such a listing as it would tantamount to capital account convertibility.
The Securities and Exchange Board of India (SEBI) had recently said the need to make an open offer to existing shareholders would arise even if 15 percent or more equity of the target company was being acquired by floating a global depository receipts issue.
Earlier, it was understood that an open offer to existing shareholders was required only if the 15 percent or more of the ordinary shares – issued within the country – were being acquired by the potential strategic partner or the investor.
In the proposed deal, Bharti intends to hold 49 percent stake in MTN, while the South African telecom major proposes to acquire 36 percent stake in the Indian firm – 25 percent directly and the remainder from existing shareholders.
In a recent statement, Bharti said it would seek an exemption from the takeover norm and that the deal would be compliant with all the norms that have been put in place in India and South Africa.