Top level team on Bharti-MTN merger

Ismail Momoniat :Dep.Director-General:Economic Policy & International Financial Relations @ the Nedlac Presso.pix Robert Tshabalala 23/02/07 © FM
Ismail Momoniat :Dep.Director-General:Economic Policy & International Financial Relations @ the Nedlac Presso.pix Robert Tshabalala 23/02/07 © FM

GOVERNMENT yesterday sent a National Treasury and Reserve Bank delegation to India in relation to the proposed merger between mobile giants MTN and Bharti Airtel.

Treasury spokesperson Thoraya Pandy confirmed that a four-person team made up mainly of Treasury officials was preparing to fly to India.

Pandy said the aim of the meeting was for the South Africans to meet with their Indian counterparts in the Indian Ministry of Finance and the Reserve Bank of India.

The delegation was led by Ismail Momoniat, head of tax and financial sector policy at the Treasury. He was accompanied by Nkosana Mashiya, chief director of financial sector policy and Unathi Kamlana, a manager in the financial sector policy department.

A fourth unnamed member from the South African Reserve Bank was present.

MTN is Africa's largest mobile operator and Bharti is the biggest in India. The merger, which could see Bharti taking a 49percent stake in MTN and MTN a 36percent stake in the Indian company, is now estimated at around $23billion (about R173billion).

This is the second delegation sent to India in connection with the deal. The first, about a month ago, comprised mainly MTN executives, but was shrouded in secrecy.

According to Treasury the MTN-Bharti deal also provided "excellent opportunities for synergies" between the two companies, including knowledge sharing, new technology capacity and leveraging which would benefit both countries.

André Wills, managing director of ICT research firm Africa Analysis, said: "I'd assume that the deal is going forward if the government is travelling to India. I suppose they're just doing their homework considering the size of the deal."

The government, which has a significant stake in MTN (21percent) through the Public Investment Corporation, has voiced its support of the deal.

The trip, according to Pandy, was approved by Finance Minister Pravin Gordhan, but Communications Minister Siphiwe Nyanda recently raised caution over the deal, insisting that the corporation should "remain South African".

Khulekani Dlamini, a director and equity trader at Afena Capital, said the complexity of the deal warranted as much regulatory "box-ticking" as possible.

"The deal is going forward, but this does not mean it'll be successful. It's a fairly complex deal, and the company hasn't really said why it should be so," he said.