The National Company Law Tribunal (NCLT) on Tuesday approved a resolution plan for Aircel, submitted by asset reconstruction firm UV ARCL. It has offered just 1.5 per cent of the total bank dues of Rs 20,000 crore owed by the company.
When contacted, the resolution professional refused to comment on the order.
In February 2018, the telco had itself filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016 (Code) after the company failed to repay its loans.
It was stated that the operator was facing trouble in a financially stressed industry, owing to intense competition, legal and regulatory challenges, high level of unsustainable debt, and increased losses.
There were various proposals, followed by legal issues, in the attempt to get investors. In 2008, AT&T held talks to buy Maxis’ stake but valuation was a stumbling block.
In February 2020, the ARC proposed a resolution plan. UV ARCL is promoted, among others, by professionals with equity participation of six public sector banks and two insurance companies, viz. Central Bank of India, Bank of Maharashtra, Union Bank of India, Bank of India, United Bank of India, Allahabad Bank, United India Insurance, and National Insurance.
Aircel’s spectrum is valid till 2026, spread across Andhra Pradesh, Delhi, Karnataka, Mumbai, and Rajasthan. The company stated before the NCLT that the spectrum was worth Rs 1,100-2,000 crore. Aircel also received nearly 14,500 km of optical fibre network, across the country.
According to media reports, the resolution plan may face hurdles in the form of the Department of Telecommunications, which had filed claims worth Rs 10,000 crore.
Deloitte, the RP in the case, was said to have approved of Rs 2,000 crore of the DoT’s claims.
UV ARC, the chosen buyer for RCom’s assets too, is likely to bank on Aircel’s spectrum assets as part of the RP.
Analyst and experts have said that Aircel hasn’t been able to service its debt due to falling revenue and dwindling cash flows, since Jio entered the market in 2016, triggering a price war.