India’s Bharti Airtel has explained to analysts how it plans to fund the proposed $10.7 billion acquisition of Zain’s African networks excluding Morocco and Sudan, reports India’s Economic Times.
Apparently, the operator is doing the explanation to quell investor fears that it will struggle to make the deal. The idea is fund the purchase from medium-term debt — i.e. loans with maturity periods between 1 and 10 years.
Akhil Gupta, group deputy CEO and MD of Bharti Enterprises, said: “If we close the deal with full debt, it will still be at a sensible level, but we are debt-averse and will use a combination of free cash flow and equity to repay debt. There will be impact on earnings in the short-to-medium term when you look for growth stories like this. Earnings per share should take a backseat for some time.”
He went on to add that Bharti is also looking at the possibility of raising more equity via Airtel itself or Infratel, its telecom infrastructure arm.
A final deal is expected to be made by end-April or mid-May.
[Via: MobileBusinessBriefing]