Bharti Airtel has raised $8.5 billion (€6.28 billion) in funds and plans to make a formal offer for Zain’s African mobile business this week.
The Indian cellco announced it had raised $7.5 billion from foreign banks and another $1 billion from the State Bank of India, the Economic Times said.
Bharti and Zain are in exclusive talks until March 25 to complete the deal, which would add 42 million new subscribers across 15 African countries to Bharti’s business, already India’s biggest.
Quoting banking sources, the Economic Times said the loans would also be used to fund Bharti’s bid for 3G spectrum, due to be sold by auction next month.
Bharti’s board approved the bid on Saturday, but may also ask Zain, Kuwait’s biggest telco, to provide an indemnity against an ownership dispute over its Nigerian business, Bloomberg reported.
South African-based cellco Econet is disputing control of the Nigerian business, which is the largest in the Zain group, accounting for 21% of ebitda in 2008, Bloomberg said.
Econet CEO Strive Masiyiwa said Zain Nigeria should be excluded from any deal because the dispute was still before arbitration.
Econet owned 5% of Zain Nigeria before the Zain-controlled Celtel International bought 65% in 2006. Econet says it should have had the right of first refusal on those shares and that matter is now being arbitrated.