Fitch Ratings has placed Indian telco Bharti Airtel on Rating Watch Negative (RWN) and expects that the ratings might go down by one mark if its deal with Zain is completed and substantially debt funded. Bharti has been included in the list following its potential acquisition of Zain’s African assets for around US$10.7 billion.
The potential costs associated with any bid for a 3G license and related CAPEX can further downgrade the rating. The uncertainties surrounding the targeted turnaround of the loss-making operations of Zain’s African assets have been taken into account by RWN.
Fitch expects the combined entity to assume the net debt of US$1.7 billion present at end-September 2009 on Zain’s balance sheet at end-September 2009 relating to its African operations.