Anil ambani’s dream ends, talks with MTN called off

Anil Ambani’s Reliance Communications (Rcom) and South African telecom giant MTN on Friday announced they were calling off talks aimed at creating a $66 billion telecom group.

“The two sides were unable to conclude the transaction due to certain regulatory issues,” said a RCOM spokesperson in a statement.

MTN and Reliance Communications started exclusive talks on May 26 and the deadline was extended to July 21.

The extension, announced on July 10, came after a claim on shares in RCom by Mukesh Ambani, estranged brother of RCom chief Anil Ambani, and a sharp drop in share prices created obstacles to completing a deal by the original deadline of July 8.

A deal would have created a $66 billion emerging markets telecom group with operations in about two dozen countries and around 120 million subscribers. When the talks began, MTN had a market capitalisation of $38 billion and Reliance Communications was worth $28 billion, but a sharp slide in markets has eroded valuations.

Mukesh’s Reliance Industries Ltd (RIL) last month wrote to MTN saying that it has right of first refusal over a sale of controlling stake in RCom. Effectively, what Mukesh’s group has said was that any sale of a controlling stake in Reliance Communications to anyone but Reliance Industries was illegal.

MTN in a statement to Johannesburg Stock Exchange said, “With regard to exclusive negotiations relating to a potential business combination between MTN and RCOM, owing to certain regulatory issues, the parties are unable to conclude a transaction. Accordingly, it has been mutually decided to allow the exclusivity agreement to lapse.”

RIL was not immediately available for comments.

THE BIG DEAL

A history of RCom, MTN talks.

• May 13: Bharti says in exploratory talks with MTN
• May 16: Bharti- MTN reach ‘in-principle’ agreement and a term sheet initiated between two lead bankers
• May 21: MTN board meets to consider term sheet. MTN proposes alternate model where Bharti becomes its subsidiary
• May 24: Bharti announces that talks with MTN have been called off
• May 26: RCOM and MTN enter into 45-exclusivity perod for talks to combine both telcos
• June 14: Mukesh Ambani’s Reliance Industries (RIL) entrs fray — claims the first right of refusal in case of sale or change of management of of RCOM
• July 3: RIL calls RCOM for mutual conciliatory talks before initiating formal arbitration
• July 7: RIL says no RCOM representative had turned up for a meeting with RIL
• July 7: RCOM invies RIL to meet in the week beginning July 14 “to clarify any doubts” on the deal structure being discussed with MTN
• July 8: 45-day exclusivity period ends
• July 9: RCOM -MTN decide to extend exclusivity period till July 21
• July 17: RIL starts arbitration proceedings against RCOM
• July 18: RCOM and MTN allow exclusivity period to lapse; end talks

Courtesy :- IBN Live

Zimbabwe to introduce $100 bn bank note

Zimbabwe’s central bank will introduce new higher-value 100 billion Zimbabwe dollar notes on Monday as part of a desperate fight against spiralling hyperinflation, the bank said.

Zimbabweans are suffering chronic shortages of meat, maize, fuel and other basic commodities due to the collapse of the once prosperous economy, which critics blame on President Robert Mugabe’s policies, including his violent seizure of white-owned farms.

Central bank Governor Gideon Gono announced on Wednesday that inflation had surpassed 2.2 million percent, though some economists put it much higher.

In a notice in the official Herald newspaper on Saturday, Gono said the Reserve Bank of Zimbabwe would introduce 100 billion dollar special agro-cheques (notes), to help consumers who currently need to carry large wads of cash even for simple transactions.

“This new $100 billion special agro-cheque will go into circulation on Monday,” the notice said.

The central bank has been printing higher denomination banknotes to keep pace with soaring prices. The most valuable bank note currently in circulation is worth Z$50 billion.

Gono said he was also considering raising the amount of cash people could withdraw daily from their bank accounts. The central bank has imposed a withdrawal limit of Z$100 billion, but this is only enough for two trips on an urban commuter bus or two loaves of bread — if one can find it.

The Zimbabwe dollar, which had been officially pegged at 30,000 to the U.S. dollar before exchange rules were relaxed recently, now trades at about 800 million to the greenback.

Besides struggling with shortages of basic goods and services, Zimbabweans also spend long hours in bank queues trying to withdraw their money.

The central bank says the limits on cash withdrawals are designed to curtail a thriving black market in foreign exchange and basic commodities.

The worsening economy could add to pressure on the ruling ZANU-PF party to make concessions to the opposition Movement for Democratic Change, which has refused to recognise Mugabe’s overwhelming victory in a June 27 presidential run-off election.

MDC leader Morgan Tsvangirai won the first round vote on March 29 but failed to get the absolute majority needed to avoid a second ballot. Tsvangirai pulled out of that poll, citing violence by pro-Mugabe militia.

Two weeks ago a German firm, Giesecke and Devrient, stopped deliveries of banknote paper to Zimbabwe following pressure from the German government amid international criticism of Mugabe’s widely condemned re-election. Gono said Zimbabwe had made alternative arrangements.

Courtesy :- EconomicTimes