RCOM is planning to raise $5-6 billion from banks to part-finance its planned acquisition of South Africa’s MTN.

RCOM is planning to raise $5-6 billion from banks to part-finance its planned acquisition of South Africa’s MTN. Reportedly, Deutsche Bank, HSBC and Barclays, among others, are arranging short-term financing for RCOM to finance the deal. A few Indian and European banks have also offered an underlying commitment to lend money for the transaction. The entire transaction is expected to be routed through a special purpose vehicle (SPV) whereby, in addition to RCOM, a few other companies will also be allowed to pick up equity. RCOM is reportedly in talks with a Middle East-based sovereign wealth fund and some private equity players to offer stake in the SPV. While other equity holders will contribute about $4 billion each, RCOM will have to invest $7-8 billion. This is likely to be funded through a mix of internal accruals and debt.