Bharti Airtel pulls out of talks with MTN

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{image-airtel+MTN1_24052008.jpg www.oneindia.com}New Delhi, May 24: Bharti Airtel, the country's leading telecom operator today said it has pulled out of talks with South African telecom operator MTN Group, saying the two firms could not reach an agreement over the structure of a combined firm.

''Discussions were on till late last night without a breakthrough. Accordingly, Bharti has decided to disengage from the ongoing talks and has conveyed the same to MTN,'' it said in a statement. Bharti and MTN had announced they were in exploratory discussions on May 5. An in-principle agreement was reached on May 16 and a term sheet was initiated between the two lead bankers. This agreed term sheet was presented to the MTN Board on Wednesday.

The MTN Board had invited Bharti Airtel for exploratory talks about combining the two firms, and a number of structures were discussed and evaluated between the lead bankers on both sides, the statement added.

The South African teleco has now proposed a new structure suggesting Bharti Airtel to be its subsidiary and exchange of majority shares of Bharti Airtel held by the Bharti family and Singtel (owns 30.5 per cent), in exchange for a controlling stake in MTN.

The proposed new structure is a completely different from what was agreed, it said.

Bharti could not accept this new proposed structure as this is convoluted way of getting an indirect control of the combined entity which would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity.

Bharti said over a dozen international bankers from the United States and Europe had given confident letters of funding of over 60 billion dollars.

The South African telecom giant is present in Nigeria, Cameroon, Ghana, Zambia and Uganda.

UNI

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