Billionaire T. Ananda Krishnan-led Aircel Limited, along with Aircel Cellular Limited and Dishnet Wireless Limited, has filed for bankruptcy under Section 10 of the Insolvency and Bankruptcy Code, 2016 after the company’s failed attempt in 2017 to merge itself with Anil Ambani-led Reliance Communications.
“The Board of Directors acknowledged that it has been facing troubled times in a highly financially stressed industry, owing to intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses. This has caused significant negative business and reputational impact on the Company,” said a company statement.
As per Reserve Bank of India guidelines, the company invoked a Strategic Debt Restructuring (SDR) scheme in January 2018, but no agreement could be reached with the lenders with respect to restructuring of its debt and funding.
“Under current circumstances, especially after the 12 February 2018 RBI guidelines, the Company believes resolution process under the Code is an appropriate recourse,” said a company statement.
The company would like to emphasise that CIRP (Corporate insolvency Resolution Process) was not a proceeding for liquidation, rather was a process to find the best possible resolution of the current situation and that would be in the best interest of everyone (vendors, distributors, employees, etc.) to protect and preserve the value of the company and manage the operations, it said..
Seeks cooperation from stakeholders
Seeking cooperation from all its stakeholders, including the vendor fraternity and channel partners during the IBC (Insolvency and Bankruptcy Code) process, the unit of Maxis Communications Bhd. has requested continued services from the suppliers and partners for the ongoing business of the company.
The company would like to communicate to all the customers that it would strive hard to provide uninterrupted service connectivity to them and appeals to them for their support during the current difficult period, the statement said.
However, Aircel services are disrupted as telcos like Idea Cellular and Vodafone have stopped interconnect services to the debt laden firm for non-payment of dues.
Tower company switches off nearly one-third of total towers
While the operator had shut services in six circles, services in other regions have been hit due to financial problems. Telecom tower company GTL Infrastructure had switched off nearly one-third of the total towers due to non-payment of dues.
The Telecom Regulatory Authority of India (TRAI) has directed Aircel to generate Unique Porting Codes (UPCs) in its operational circles where a large number of subscribers are facing difficulties in porting their mobile numbers.
Aircel has over 85 million subscribers across 17 telecom circles, according to TRAI data.