Mobile operator Aircel, which filed for bankruptcy last week, is looking at multiple options to keep operational expenses low, including scaling down operations in at least three more circles. It is also hoping to get interim funding to continue operations without a pause.
Aircel had earlier shut services in six circles after its existing promoters declined to pump in additional funds. The company has since sought protection under the Insolvency & Bankruptcy Code, 2016.
According to industry sources, the company has shared a proposal to stay afloat by building its data business, embarking on a capex-light model (except in Tamil Nadu), and tying up with competition for 4G services. Aircel intends to operate as a “premium-value brand”, providing 2G, 3G and 4G services and emerging as a “self-sustaining” company, the sources said.
These proposals, which were earlier shared with all stakeholders, are likely to be examined at the company’s Joint Lenders’ Forum (JLF) this week, multiple sources close to the development told
Aircel intends to minimise services across Punjab, Delhi, Mumbai and parts of West Bengal. These circles, unlike the six circles where Aircel shut down services in January, will not close down. If they do, the company will have to surrender spectrum.
“The company intends to run services in Kolkata and surrounding areas,” one of the sources said.
Further, a number of investors — both existing and new — have committed to provide interim funding to the company, even as bankruptcy proceedings are on, another source said, but declined to divulge details of the promised investment.
To strengthen its operations, Aircel will look at building data businesses across the South, East and North circles. These include Tamil Nadu, Karnataka, Andhra Pradesh, the North-East, Assam, Kolkata, Jammu & Kashmir, Odisha, Bihar and Rajasthan.
The company is also in talks with competitors for intra-circle roaming agreements.
Waiting on NCLT
However, the urgent need before Aircel is the admission of its resolution process at the National Company Law Tribunal (NCLT). On admission, an Insolvency Resolution Professional (IRP) will be appointed and tasked with raising the interim funding.
“The IRP will work with the Committee of Creditors to finalise a resolution plan, which will include future business plans, including which circles to operate and which to shut down. The intention is to protect the business and the employees,” another source said.
As on date, Aircel has about 4,000 employees, and a debt of about ₹15,500 crore. “This is a resolution process (bankruptcy protection) and not liquidation,” another source said, adding that the resolution is expected to be completed in a few months.
An e-mail sent to Aircel went unanswered.
Also read: Madras HC issues notice to govt, TRAI on stopping of Aircel’s service