Bharti eyes $7 billion offshore loan for Zain suggest

David Lau and Sumeet Chatterjee HONG KONG/MUMBAI Wed Feb 24, 2010 6:41am EST Related News Bharti eyes $7 bln from offshore mkt-Basis PointWed, Feb 24 2010Bharti, SBI in talks over Zain deal fundingWed, Feb 24 2010Bharti could line up Zain finance this wk-sourcesTue, Feb 23 2010Zain to focus on Gulf and Middle EastTue, Feb 23 2010Zain to focus on Gulf and Middle EastTue, Feb 23 2010 Stocks & &

HONG KONG/MUMBAI (Reuters) - Banks are discussing a $7 billion, five-year, offshore loan to back Bharti Airtel"s (BRTI.BO) $9 billion offer to buy Zain"s (ZAIN.KW) African cellular assets, sources told Reuters Basis Point.

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The remaining $2 billion equivalent will come from the rupee market, the sources said, adding the currency mix was yet to be finalized.

Separately, the chairman of India"s top lender, State Bank of India (SBI.BO), told reporters in Mumbai Bharti had shown interest in obtaining funding from his bank for the Zain assets deal and was in talks with them.

"Bharti is interested," O.P. Bhatt said, without elaborating.

During its tie-up talks last year with South Africa"s MTN (MTNJ.J) that were aborted, Bharti had approached State Bank of India for dollar and rupee loans totaling about $2 billion, a government minister had said last August.

Shares in Bharti fell 1.4 percent on Wednesday in a slightly weak Mumbai market, taking losses to more than 12 percent since the company confirmed its talks with Zain, triggering concerns the deal may put pressure on earnings in the near term.

Bharti"s market value has lost $3 billion to $22.6 billion.

The firms are in exclusive talks until March 25 for the proposed deal, which would give Bharti access in 15 African countries with about 42 million subscribers.

LOAN PRICING TALKS

People familiar with the deal have told Reuters that Bharti may finalize by Friday its financing details in what could be the largest acquisition loan for an Indian borrower.

The Basis Point report also said pricing talks had emerged for the offshore loan with some bankers saying Bharti can achieve an all-in of below 300 basis points, lower than 315 basis points it was supposed to pay for $3 billion-$4 billion loan lined up last year for the thwarted MTN (MTNJ.J) deal.

Some bankers, however, think because of the mammoth size of the present Zain financing, pricing will have to be more than 315 basis points.

Standard Chartered (STAN.L) and Barclays (BARC.L) are advising Bharti in the deal. (Writing by Devidutta Tripathy; Additional reporting by Pratish Narayanan and Tamajit Pain; Editing by Ranjit Gangadharan)

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