A rising South African currency could increase the cash component that Bharti Airtel would have to pay to MTN shareholders. Bharti, India’s largest Smartphones Bharti-MTN Deal Cos going for disinvestment mobile company by subscribers as well as revenues, will have to pay at least $413 million (Rs 2,017 crore) more because of the currency appreciation while it get an additional Rs 351 crore ($72 million) from MTN because of the rupee depreciation against the dollar. However this is over and above the sweeteners which Bharti will have to offer MTN shareholders for the deal to go through.
In the past few months the South African rand has appreciated against the dollar by over 6%. In May end Bharti had said that it would have to make a cash payment of 86 Rand for every MTN share. The total dollar outgo at that time came to around $ 6.94 billion. However, with the rand appreciating against the dollar, this amount has now shot by around $413 million to around $7.38 billion. The deal’s contours, unveiled in May, involve a complex structure in which both firms would pay cash and equity for stakes in each other, the end result of which will see Bharti Airtel getting a 49% stake in MTN and the South African telco and its shareholders getting a 36% economic interest in Bharti. According to the original deal, Bharti was supposed to get $2.9 billion in cash from MTN. Due to the rupee depreciation against the dollar in the past few weeks, the rupee amount will go up by Rs 351 crore. When contacted a Bharti spokesperson said, “Beyond what we have already communicated in out media statement, we have no further comment to offer at the moment.” 6amesh shareway --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
