Private equity firms Blackstone, Apax Partners and Carlyle are gearing up a war chest of $5billion for Anil Ambani’s Reliance Communication Ltd’s (R com) deal with the South African telecom giant MTN.
However the role of the private equity firms is not very clear since the corpus of $5 billion is not a very substantial amount for the deal, which would essentially entail exchanging shares. According to sources the firms are willing to raise the corpus for the deal which if comes through would see, Anil Ambani exchange his majority stake in his Group’s flagship company for up-to 39.4% stake in the resulting firm. R com’s banker on raising funds for the acquisition is Deutsch Bank.
On the other hand, Bharti Airtel Ltd in a written statement had said that internationally reputed bankers from the US and Europe had promised funding of over $60 billion for the possible deal. The deal did not come through as Bharti refused an offer to become a subsidiary of the South African telecom giant by swapping the shares held by the Bharti family and Singtel in exchange for a controlling stake in MTN. R Com had entered into exclusive negotiations for a period of 45 days with MTN to discuss various deal structures. A statement issued by the firm also said that the R com MTN deal is more doable than the Bharti MTN.
Source: Financial Express