The proposed MTN/Bharti telecommunications tie-up, which would create the world’s third largest cellphone company, will not include dual listings because of India’s concerns about the convertibility of the rupee. This is something of a slap in the face for SA government which has been advocating a dual-listed structure to maintain some semblance of a South African character to the joint entity. What this decision means for the deal is not absolutely clear, but suggests the transaction will become a mostly if not purely cash affair. The original plan was for a partial share swap and cash deal, with a further portion of Bharti to list on the JSE. As a result, Bharti would own 49% of MTN, and MTN 15% of Bharti. A further 10% of Bharti would be listed on the JSE. That plan is now dead. Finance department officials from SA went to India to encourage Indian authorities to consider a dual-listed structure, which is not allowed under existing Indian laws. The firms extended the deadline for their exclusive talks twice and the current one expires tomorrow.
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