The reason: under the US laws companies based in the country cannot finance deals in markets like Iran, Liberia, Syria and Sudan against whom they have imposed comprehensive or simple sanctions.
The Office of the Foreign Assets Control in the US has clear rules for companies which do not permit them to invest or borrow to companies in these countries.
Merchant bankers say that this has been a key reason why companies which have been looking at raising debt to finance their buying of an equity stake in MTN have been confronted with major issues from US bankers.
Merchant bankers however say, that these markets are important for MTN as they constitute for over 18% of its total subscriber base and as much as 25% of its subscriber base outside South Africa. Also the four markets constitute for 11% of MTN's revenues.
Bankers say that that could be the key reason why Reliance Communications is not looking at raising debt to finance an acquisition of MTN.
Unlike the Bharti Airtel model which was looking at merging MTN into Bharti, the Anil Ambani company has been looking at some kind of a collaborative arrangement which could include swapping shares in each others company were no cash transaction is involved.
More From This Section
Bankers also point out that MTN group Chairman M C Ramaphosa is also well connected politically and is widely expected to be the presidential candidate for the country in elections which are slated next year.
As a result the company management is clear that there is no question of selling out the company to new players.
Meanwhile investment bankers say that talks have already started between MTN and Reliance Communications in Johannesburg. Reliance and MTN has agreed to have "exclusivity" talks for the next 45 days.
The announcement was made yesterday after Bharti announced that it was pulling out of the negotiations with MTN.