Aircel to file for Insolvency with NCLT

Highlighting the struggles of India’s smaller telcos in a stiff competitive market, Aircel and its two units filed for bankruptcy in the National Company Law Tribunal. This also comes amidst the crackdown on large loan defaulters.

Detailed talks with lenders and shareholders failed to yield a consensus on restructuring Rs 15,500 crore of debt and getting funding, leaving resolution under the Insolvency & Bankruptcy Code, 2016, as the only option, Aircel said in a statement on Wednesday.

“No agreement could be reached. Under current circumstances, especially after the 12 February 2018 RBI guidelines, the company believes resolution process under the Code is an appropriate recourse,” the company, majority-owned by Malaysia’s Maxis, said in the statement.

If Aircel’s request gets accepted, NCLT will appoint an interim resolution professional who will have 270 days to find funding and buyers as part of a plan to repay lenders. If that is not agreed, the carrier will be declared bankrupt and sent into liquidation.

The debt-ridden telco, which had about 80 million subscribers in January, is struggling to maintain operations and retain users. Aircel is now trying to work out pacts with other telcos to keep its network running and facilitate users who want to port out to other operators.