Bharti tapping foreign currency loans for Zain buy: report

Bharti Airtel is expected to finance its $10.7 billion bid for Zain Africa BV, the African assets of Gulf telecom major Zain, through foreign currency loans, reports quoting sources close to the matter said.

Bharti is reported to be in talks with the State Bank of India and some foreign banks including Barclays, Standard Chartered, Goldman Sachs and Nomura, on financing the deal, ET Now TV channel said.

Barclays and StanChart are also advising Bharti Airtel on both the merger and funding the acquisition of Zain's assets in Africa.

Zain has cumulative debt of around $6 billion and an acquisition of Zain would raise Bhart's debt burden manifold, according to analysts.

Bharti's own debt of around Rs10,600 crore ($2.29 billion) as of end-December 2009 is also expected to rise to around Rs12,000 crore ($2.59 billion) by the end of the current fiscal.

Some reports said Bharti would most probably finance nearly all of deal, worth around $10.7 billion, through foreign currency loans.

Bharti, meanwhile, is in exclusive talks with Zain for acquiring all of its African assets, potentially worth around $10.7 billion. (See: Bharti all set to acquire Zain Africa B)