Bharti Airtel may enter into a part cash, part equity deal to buy a controlling stake in South Africa-based MTN. India’s largest telecom services company by subscribers is considering the formation of a special purpose vehicle (SPV) for this purpose and is expected to raise debt in it. Sources said that Bharti Airtel will give a guarantee for debt in the SPV.

The special purpose vehicle is likely to buy 51per cent equity in MTN. Currently, Sunil Bharti Mittal’s family has about 27 per cent shares in Bharti Airtel while Singtel has about 31per cent shares in the company. India is currently the world’s fastest growing market, with the country adding about 8.5 million subscribers every month. If Bharti can buy out MTN, it will have presence in several new high growth markets. However, the biggest challenge for Bharti is to arrange funds for such a big deal. As it will not be easy for the company to arrange such funds, it is talking to Singtel for the acquisition. MTN has been looking for a buyer for the last one year. Vodafone, China Mobile and Reliance Communications too have shown interest in MTN.