Telecom giant Bharti Airtel today said it would pay about $9 billion (nearly Rs 42,000 crore) to buy African assets of Kuwait-based Zain, announcement of which pulled down Indian firm's share prices by 13 per cent in two days.
"The total agreed enterprise valuation of $10.7 billion is likely to result in a total payout of around $9 billion based on the estimated net debt of about $1.7 billion as on 31st December 2009," Bharti said in a statement here.
Company's statement comes in the wake of Bharti's shares lost Rs 40 a share to close at Rs 272.45 per share since yesterday leading to erosion of market capitalisation by about Rs 16,000 crore to Rs 1.03 lakh crore.
Of the $9 billion payout, Bharti would be paying $8.3 billion immediately after the deal and the remaining $700 million after one year.
Meanwhile, Zain telecom today said that it expects returns worth $5 billion from the sale of the company's African assets to Bharti Airtel.
Asked to clarify about the $10.7 billion valuation Bharti had announced yesterday, the company officials said this is an enterprise value that includes debt and equity.
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Bharti has offered to buy all of the company's African operations, except in Sudan and Morocco, for $10.7 billion.
Zain in a statement to the Kuwait Stock Exchange said that after payment of certain obligations, the sale of African assets to Bharti is expected to generate returns of $5 billion.
Bharti and Zain have agreed to hold exclusive discussions untill March 25 to complete the transaction involving various regulatory clearances.