Bharti Airtel has approached the State Bank of India for a $2bn loan as part of a plan to offer more cash and fewer shares to sweeten a $23bn tie-up with South Africa’s MTN, people close to the deal have told the Financial Times.

India’s largest mobile operator is understood to have requested the $2bn loan so it could increase the cash component of the deal by 5-10 per cent to about a net $5bn, compared with $4bn under the original plan. This would reduce the issuance of global depository receipts, according to one person familiar with the matter.

The move is aimed at soothing concerns over the alliance with MTN, which Bharti hopes could lead to a full merger. A combination would create the world’s third-largest telecoms group with more than 200m subscribers and a market capitalisation of about $61.3bn, based on last Friday’s closing stock prices.

MTN is seen as a national champion in South Africa and any perception that it could be handed over to foreign control would be politically sensitive.

Bharti and MTN would have to secure regulatory approval from the 20-plus countries in the Middle East and Africa, where the combined company would operate. Under the terms announced in May, MTN would acquire 25 per cent of Bharti with a cash payment of $2.9bn and new shares.

Bharti planned to buy 36 per cent of MTN’s existing shares for R86 plus 0.5 Bharti shares per share, giving the Indian group a 49 per cent stake in MTN.

Bharti and MTN recently extended their exclusive talks period for a month to August 31, after the two companies failed to agree over the structure and terms of the deal.

“Bharti is moving in the right direction to close this very difficult deal . . . The fact that Bharti plans to put more cash is a clear sign that they are serious,” another person close to the deal said.

Bharti declined to comment except to say talks were ongoing.

Yet, when Bharti and MTN announced that discussions were being extended, they said “the structure and terms of the potential transaction may be adjusted to reflect further discussions between the parties”.

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