I had mentioned about it earlier(and this link) that Bharti would be looking forward to buy out MTN with Singtel’s help. They don’t have enough money (and guts) to venture out; it’s too early in their life cycle to take big gamble and risks like these. Although Sunil Bharti Mittal promotes himself agressively (and is probably not rich enough like Mukesh Ambani), he is spreading himself out too thin (witness his forays in Retail). I doubt whether he’d go under but has been willing to act as a front for Singtel’s acquistion.
Here is the published story from Business Standard with all legal flotsam. Of note here is the following:
1) Sunil Mittal, the founder of Bharti Airtel, plans to set up a separate company in partnership with Singapore Telecommunications (SingTel) that will be the vehicle for acquisition of the South Africa-based MTN Group.
2)The SPV (Special Purpose Vehicle) may be registered in a tax-haven country, like Mauritius or Bahamas, the sources said.
3)When contacted, a Bharti Airtel spokesperson said: “We have already issued a statement and have nothing further to add to our last statement. “At this stage, MTN is not commenting further than the cautionary announcement released on May 5, 2008,” an MTN spokesperson said.
4)As equipment and software purchases are huge for telecom companies, the merger would give joint bargaining power to Bharti.
5)”The SPV would also look at listing on the New York Stock Exchange, where valuations of telecom companies are relatively higher,” said a source. The SPV would also be the vehicle for the Bharti Airtel-MTN combine’s future acquisition plans in the US and Europe.
I stand vindicated regarding my future predictions and the fact that Bharti is looking forward to leverage it’s position in purchase agreements. This is in addition to create monopolistic telephone operators which would limit the choice to the consumers.
Pity that these morons can’t extend something to Broadband initiatives. All this is being done prior to the auctioning of 3G licences. Bharti wants to have an exciting piece of this cake. Let’s see who spoils their party….
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