With only seven days now left for Bharti's exclusive talks with South African MTN to come to an end, the finance ministry said on Wednesday the domestic firm may have to seek FIPB approval for the deal as the transaction involves swapping of shares.
According to finance ministry officials, Bharti which is in exclusive talks with MTN till September 30, will also have to seek the approval from the Foreign Investment Promotion Board if the foreign direct investment limit (direct or indirect) crosses the 49 per cent limit.
For the telecom sector, the FDI ceiling is 74 per cent. However, all proposals wherein the FDI above 49 has to come via FIPB.
If it comes to FIPB, then it (FIPB) will take a call on it within 30 days, they said but added that the companies are yet to approach the finance ministry for approval.
As on June 30, 2009, the total foreign shareholding in Bharti Airtel is a little over 42 per cent.
"The proposed deal has not come to either the capital markets division of the finance ministry for dual listing or in the FIPB so far", they said.
According to original terms of the transaction, Bharti will acquire 49 per cent in MTN and the South African firm will acquire 36 per cent economic interest in Bharti.
Reports say Bharti has sweetened its offer for the 49 per cent stake in MTN by $900 million $14 billion in cash and stock, and has agreed to retain MTN's senior management for at least two years.
Image: Bharti chief Sunil Mittal
