CURRENCY SPOILER

Stronger rand may see Bharti shell out more Mohit Bhalla & George Smith Alexander ET NOW  BHARTI Airtel will have to pay at least $413 million (Rs 2,000 crore) more than originally presumed to shareholders of MTN if a merger deal fructifies because of the South African currency's appreciation against the dollar.      Hopes that the largest mobile phone firms in India and Africa will merge and the anticipated inflow of rand has boosted the value of the South African currency against the dollar by over 6% in recent weeks.      When the two companies announced merger talks in May, the total dollar outgo at that time was estimated at around $6.94 billion, with Bharti paying 86 rand for every MTN share. But with the South African currency strengthening, this amount has now risen to $7.38 billion.      The movement in the currency markets has prompted both companies to consider settling the transaction in dollars instead of in the Indian and South African currencies, people close to the dealmaking said.      The deal's contours, unveiled in May, involve a complex structure in which both firms would pay cash and equity for stakes in each other, the end result of which will see Bharti Airtel getting a 49% stake in MTN and the South African telco and its shareholders getting a 36% economic interest in Bharti.      Bharti was supposed to get $2.9 billion in cash from MTN. Due to the rupee's depreciation against the dollar in the past few weeks, the amount paid in the Indian currency will go up by Rs 351 crore. A Bharti representative declined to comment.  BANKERS SHORTLISTED  Bharti has shortlisted eight banks to finance the likely transaction, advising them to submit final bids at an interest rate of 315 basis points above the benchmark London interbank offer rate (Libor), or 3.15%, bankers aware of the development said. The six-month Libor is 0.83%.      ANZ, Barclays, StanChart, Citi, BNP Paribas, Bank of Tokyo Mitsubishi and UFJ Financial have been chosen for the funding, raising hopes that the nearly $23 billion transaction, the biggest cross-border M&A deal by an Indian company, was inching towards a successful outcome.      Bharti and MTN have extended exclusive merger talks twice already as they grapple with issues surrounding the pricing of the deal and the structure of the alliance. A successful transaction will create a global telecom powerhouse with more than 200 million subscribers and revenues of over $20 billion. Barclays named joint advisor  THE BANKS have been advised to submit bids for loans of $300-500 million each. In an email on Tuesday, Bharti also said Barclays has been appointed as joint M&A Advisor along with the lead financial advisor, Standard Chartered Bank. The banks have been informed that they will get an opportunity to participate in all deal-related incidental business arising from this transaction. Senior bank executives said this will be a major driving factor for banks to finance the deal at the lowest cost to Bharti. The overseas loan has been brokeninto different tenures of two, three, four and five years. The blended pricing, which includes the fees, has been fixed by the corporate at 315 basis points. The dollar funding has been fixed at $3-3.5 billion while the rupee funding will be $1.5-2 billion. Bankers, however, added that as of now, the total debt is still being pegged at $5 billion. For the rupee loan, the funding of which is being led by State Bank of India, Bharti is said to have received one of the best rates in recent times, 8.5%. Bharti is expected to finalise the terms of the funding pacts with the banks in a couple of days.