No discrimination against MTN: PM

PM Manmohan Singh has strongly backed Bharti group`s efforts for acquiring stakes in telecom gaint MTN.

Updated: Sep 26, 2009, 16:58 PM IST

Pittsburgh: Prime Minister Manmohan Singh on Friday assured South Africa that there will be no "discrimination" against the proposed USD 23-billion merger deal between Bharti and MTN, facing the hurdle of dual listing.

"As far as MTN issue is concerned, I mentioned it to (South African President) Jacob Zuma. I sincerely hope that this deal would go through and there will be no discrimination against it," he told reporters in reply to a question at a press conference here.

Bharti and MTN are currently engaged in exclusive talks till September 30, 2009, for a possible merger deal involving cash and share-swap to create the world`s third largest telecom operator with over 200 million subscribers.

Two recent developments--changes in the takeover norms, announced by SEBI, and South Africa`s demand to allow dual listing of MTN in order to retain its identity, had raised concerns over the fate of the deal.

Supporting the Bharti group`s efforts to acquire stake in MTN and hoping that the deal would go through, Singh said officials of the two countries would discuss the issue.

Commenting on the deal, particularly the dual listing clause, Finance Minister Pranab Mukherjee had recently said "We welcome the deal, but it should be in context of existing laws of the land. These have to be kept in mind."

According to the initial agreement, MTN and its shareholders would acquire 36 percent stake in Bharti while Bharti would hold a 49 percent stake in MTN.

The process would see a transaction of USD 13 billion in cash and USD 10 billion in shares.

South Africa has said it is working closely with India on the proposed deal that requires exemptions on a range of exchange-control regulations.

"We have received an application from MTN for an exemption on a range of exchange-control regulations, and due process is being followed. The SA government is working closely with the Indian government through their Finance Ministries.

"It would be important that such mergers are not only of
benefit to the two companies, but to both countries as well,"
South African government`s spokesperson National Treasury
Thoraya Pandy had said.

Earlier this week, a delegation from South Africa had held discussions with the SEBI, RBI and Finance Ministry officials and is likely to take a decision on the contentious issue of dual listing soon.

Sources also said the two companies may extend the
exclusive talks period beyond September 30 to work out an
alternate structure of the deal.

Bureau Report