SBI commits $1.5 billion loan to Bharti for Zain buy

Country's largest lender State Bank of India has committed $1.5 billion (around Rs 6,900 crore) to telecom giant Bharti to part-finance its acquisition of Kuwait-based Zain's African assets.

"SBI has committed a total of $1.5 billion to Bharti for the deal. The dollar part will be disbursed through the foreign offices of State Bank," a top SBI official told PTI on condition of anonymity.

SBI is the largest contributor in the bank consortium, which was formed to provide $7.5 billion loan to Bharti for the deal. Other mandated lead arrangers include StanChart ($1.3 billion), Barclays ($0.9 billion), Citi, JP Morgan amongst others.

Out of the committed $1.5 billion, State Bank would provide USD 500 million as dollar loan while the rest will be disbursed in Indian Rupee equivalent to the US Dollar, the official said.

The bank-syndicate has priced the loan at 195 basis points above the London Interbank Offered Rate (Libor). The loan will carry a tenure of five years, the official said. 

The Board of Zain, which is Kuwait's leading mobile company, today approved the sale of its African assets to India's largest telecom firm for an estimated $10 billion dollars (around Rs 46,000 crore).

The Bharti-Zain deal is expected to give the Indian telecom giant access to the lucrative African market.

Sources said Bharti's lead-arranger and lead-advisor Standard Chartered Bank has committed the second highest amount at $1.3 billion followed by $0.9 billion by Barclays.

Global Investment House KSCC is serving as the regional financial advisor on this transaction.

Bharti has over 125 million subscribers in India and if the deal goes through, the company would have a major footprint in the African market and would get access to over 40 million customers of Zain in the continent.