Prime Minister supports Bharti-MTN deal

      Prime Minister Dr. Manmohan Singh on Saturday supported Bharti Group's efforts to acquire stakes in South African telecom giant, MTN. Bharti and MTN are looking at 23 billion dollars deal with over 200 million subscribers to create world's third largest mobile firm. Bharti and MTN have been engaged since May in exclusive talks for a cash-and-stake-swapping deal valued at about 23 billion dollars. Their talks have been extended twice and the present deadline ends on September 30,2009. The deal is shrouded in uncertainty as the Sept. 30 deadline approaches. South Africa is eager to retain MTN's national character and has approached the Indian authorities to consider a dual-listed structure, which is not allowed under existing Indian laws. Dr. Singh after the conclusion of G20 summit in Pittsburgh said that he hoped that deal would be materialized. "As far as the MTN issue is concerned I did mention this to President Zuma that I sincerely hope that this deal will go through and that Indian companies will not be subjected to any discriminatory treatment. It has been agreed that this matter can be further discussed with the government of South Africa," said Dr. Manmohan Singh. As per the initial agreement MTN and its shareholders would acquire 36 percent stake in Bharti while the Indian company would acquire 49 percent stake in MTN. Analysts say that for a dual listing, India would need to amend rules and allow full capital account convertibility. For telecom, while the overall FDI cap is 74 per cent, up to 49 per cent is allowed through the automatic route. But between 49 per cent and 74 per cent the approval of the Foreign Investment Promotion Board is mandatory. The deal was first announced in May with a second deadline due to lapse on September 30. The deal, which will be the largest in the global telecom space, will be subject to South African Government approval (especially on whether it meets Black affirmative action policies), after which it will be signed and will require sanction from 75 per cent of shareholders present and voting in both companies.

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