Sunil Mittal to resume talks with MTN
Bharti group chief Sunil Mittal is likely to resume talks with MTN’s top management to carry forward negotiations left inconclusive in London for a possible merger of the two entities.business Updated: May 21, 2008 02:38 IST
Bharti group chief Sunil Mittal is likely to resume talks with MTN’s top management in Johannesburg to carry forward negotiations left inconclusive in London for a possible merger of the two entities.
Mittal is expected in the South African capital shortly to hold parleys, industry sources said.
Meanwhile, Telecom Watchdog, an NGO, cautioned the MTN chairman that a merger of the two companies would not be in compliance with regulations in India. Telecom Watchdog secretary Anil Kumar said: “I have written to MTN chairman Cyril Ramaphosa to take note of the fact that a 51 per cent acquisition by Bharti is okay but a full-scale merger through share-swap will surely breach FDI guidelines in India, which is sure to be challenged legally.
“I have told him not to take any dubious route for merging with Bharti and circumvent the laws. It is okay if it is a 51 per cent acquisition.” Foreign Direct Investment in Bharti already touches 65 per cent and it can absorb a further nine per cent.
“In case of a merger, we have apprehensions of a possible breach of Indian regulatory norms related to foreign investment... In case of any regulatory breach, we will not hesitate in going to the Indian courts for legal recourse to stop any illegalities,” Kumar has written.
Russian operator Altimo’s arm Vimpelcom and Deutsche Telekom are also believed to have expressed interest in MTN, a leading telecom player in Africa. When contacted, Deutsche Telekom said it does not comment on rumours and speculation, while queries to Altimo officials remained unanswered. Earlier, the UAE’s incumbent operator Etisalat had said it was examining the possibilities of joining the fray for MTN. A Bharti spokesperson refused to comment and MTN could not be reached immediately.
MTN CEO Phuthuma Nhleko reportedly told a German magazine, “European telecom companies in Africa have a general interest. I, therefore, cannot exclude in the future renowned telecom companies expressing an interest. We are a public company. And there is always the possibility that the shareholders (get) a lucrative takeover bid, without the involvement of the senior management.”