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MTN first-half profit up, no decision on Bharti deal

MTN Group reiterated that no decision had been taken with regard to its proposed merger with India’s Bharti Airtel on Thursday after posting a rise in first-half headline profit.

”No decision or agreement to acquire any shares or Global Depository Receipts or implement the potential transaction … has yet been made by the boards of either MTN or Bharti,” MTN said in a statement.

The group said the rationale for the transaction was compelling and included diversification and synergy benefits.

MTN and Bharti have once again extended exclusive talks aimed at creating the world’s number three mobile firm, frustrating investors who wanted the deal to be finalised, and raising concerns the deal’s structure was too complex to succeed.

Both firms agreed to extend talks to September 30, after previously extending discussions by a month to August 31, as they negotiate a complex $23-billion cash and share-swap deal aimed at an eventual full merger.

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MTN CEO Phuthuma Nhleko said under the proposed deal with Bharti, MTN would continue to be listed on the Johannesburg bourse.

He reiterated that the company was actively seeking expansion opportunities in emerging markets.

The South African group is trying to diversify its earnings beyond its key markets of Nigeria and South Africa and has been banking on a new venture in Iran, which some investors deem risky, given the country’s nuclear stand-off with the West.

MTN said its total subscribers grew 14% to 103,2-million in the six months to end-June, and Nhleko said the company expected to add 22,6-million users by Dec 2009.

The company said its operation in Nigeria, Africa’s biggest telecoms market, has increased its subscribers by 19% to 27,3-million, and is expected to add 7,4-million more by December. MTN said its MTN Irancell unit increased its subscribers by 20% to 19.2 million.

MTN said headline EPS rose 22,5% to 415,5 cents, in line with the company’s forecast for a rise of between 19,8% and 24,8%.

But MTN said adjusted headline EPS fell 10,9% to 363,8 cents per share. Headline EPS, the main profit gauge in South Africa, excludes certain one-off, financial and non-trading items. — Reuters

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