Inching towards a formal conclusion, the Committee of Creditors (CoC) has approved the partial liquidation of beleaguered telecom company Aircel. The liquidation does not include bulk SMS and enterprise businesses.
Separately, the operator received a proposal from an asset reconstruction company (ARC) for its bulk SMS and enterprise businesses, which is being examined by the lenders’ committee.
“The approval from the CoC came in today and now it has to get the formal approval from the National Company Law Tribunal (NCLT), which is a more of a formality,” a source close to the development told
The lenders have reached an agreement to take a haircut of about 80-85 per cent, the source added. Aircel, which had earlier received a resolution plan from UV Asset Reconstruction Company Ltd (UVARCL), will now consider the proposal for Aircel’s bulk SMS and enterprise businesses. UVARCL had offered ₹150 crore upfront payment, with proposals for additional funding on successful running of the businesses, another source said.
Following the “agreed haircut”, about 50 per cent of the remaining amount would be assumed as debt by the ARC and the balance will be converted into equity.
“If the ARC’s proposal is approved, then it will come on board and will run the company for another 12-18 months,” a source said.
UVARCL’s proposal is currently under the CoC’s “active” consideration, while the company is being managed by the Resolution Professional (RP) appointed by NCLT. Aircel owes about ₹20,000 crore to a clutch of 12 financial institutions.
SBI tops lenders’ chart
The State Bank of India has the biggest exposure of 36.6 per cent, followed by Punjab National Bank at 15.1 per cent, China Development Bank Corporation 13.7 per cent and Bank of Baroda 10.5 per cent.
Canara Bank, Nordic Investment Bank, AB Svensk Exportkredit, Exim Bank and Syndicate Bank are the other lenders to Aircel.
On February 27, 2018, Aircelfiled for bankruptcy protection with the NCLT in Mumbai after its Malaysian promoter Maxis Communications decided against pumping additional funds into the company. The tribunal admitted Aircel’s application on March 12, 2018, and appointed the Resolution Professional (RP).
In April last year, Maxis Communications infused an additional ₹95 crore in Aircel to enable the telecom operator pay salaries and meet certain expenses. The move — which was more of a goodwill gesture than an investment — came after the Malaysian parent declined in February to provide any more funds.