MTN - Reliance Talks Cool on Indian Regulatory Uncertainty
Published on: 10th Jul 2013
Note -- this news article is more than a year old.
The on off talks between an Indian and a South Africa mobile network to merge are back off again.
Citing three sources familiar with the matter, Bloomberg News reported that the latest talks -- this time between MTN and Reliance Communications have been put on hold. The talks had been around the possibility of MTN injecting around USD1.2 billion into the debt laden Indian company in exchange for a 24% stake.
The two companies were unable to able to agree on the price of a potential transaction, two of the people familiar with the matter said.
MTN is now also however reported to be concerned about the deal due to the ongoing regulatory uncertainty in India.
The Indian government is expected to publish details of its new rules on mergers between local mobile networks later this month. This is widely expected to see some much needed consolidation in the market to reduce cut-throat competition.
MTN's debt rating was recently downgraded due to concerns about its exposure to weak African markets, and its reliance on Nigeria for 38% of its consolidated EBITDA. Expansion into India could diversify its revenue sources and stabilize its debt.
On the web: Bloomberg News