India's largest telecommunications operator, Bharti Airtel Ltd., has finalized $8.3 billion in financing needed for its proposed acquisition of the Africa assets of Kuwait's Zain, Bharti said Sunday.
"The financing was oversubscribed, with major international banks committing to underwrite the total amount," Bharti said in a statement.
Zain accepted a $10.7 billion offer from Bharti Airtel in February to sell most of its Africa businesses as it refocuses on its home market in the Middle East.
The deal includes $1.7 billion of Zain debt, plus $8.3 billion to be paid by Bharti upfront and $700 million one year from now, said a person familiar with the negotiations who spoke on condition of anonymity because he was not authorized to speak to media.
A consortium of international banks, led by Standard Chartered Bank, Barclays and the State Bank of India will provide $7.5 million in loans, Bharti said.
ANZ, BNP Paribas, Bank of America Merrill Lynch, Credit Agricole CIB, HSBC, Singapore's DBS Group, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. also participated in the underwriting, it said.
The State Bank of India, India's largest lender, has agreed to give Bharti up to an additional $1 billion equivalent in rupees which would also cover transaction costs, the statement said.
The company would not disclose the terms of the loans.
Bharti finalized the financing with its board at a meeting Saturday and has until March 25, when the period for exclusive talks expires, to work out final details and complete due diligence.
The deal does not include Zain's holdings in Sudan or Morocco.
It is not clear what steps Bharti will take, if any, to protect itself against an ongoing legal dispute over Zain's Nigerian assets.
A successful closure would make Bharti an even bigger player in the developing world, and offer it some relief from India's increasingly crowded market. Faced with declining market share and slipping revenues at home, Bharti has been trying to replicate its low-cost business model abroad, but two earlier attempts to merge with South Africa's MTN Group Ltd. were foiled when talks broke down.
For Zain, known officially as Mobile Telecommunications Co., the deal is a chance to cash in on an expansion led by ousted chief executive Saad al-Barrak, after a previous attempt to sell the African holdings failed.
The deal, if successful, would be among the biggest overseas acquisitions in Indian corporate history.