wordpress blog stats
Connect with us

Hi, what are you looking for?

Debt ridden Aircel set to file for bankruptcy: Reports

Update: The Economic Times has reported that Aircel, along with its units-Aircel Cellular and Dishnet Wireless, has filed for bankruptcy in the National Companies Law Tribunal in Mumbai on Wednesday.

“Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to restructuring of its debt and funding,” Aircel reportedly said in a statement.

The Telecom Regulatory Authority of India (TRAI) has directed Aircel to issue additional unique porting codes to allow its subscribers the facility to switch service providers.

Earlier: Telecom company Aircel is reportedly set to file for bankruptcy at the National Company Law Tribunal (NCLT) and its board has been dissolved ahead of the move. This development has been reported by the Economic Times. The impending bankruptcy and the upcoming merger between Vodafone and Idea will mean that the mobile telecom business in the country could be left with only 3 major private players.

Aircel’s Malaysian parent company Maxis had earlier proposed a cash infusion to support the debt-laden company but has pulled the plug, the ET report says quoting an anonymous source.

In January, Aircel had tried to enter a strategic debt restructuring (SDR) process where lenders led by State Bank of India agreed to take shares in Aircel to replace their loans and recover their dues in an eventual sale of assets of the company.

“There is no cash to run the business and no visibility to free any more up,” an individual familiar to the matter told ET, adding that the company is likely to stop paying salaries by the end of the week.

Loss of subscribers and a failed merger

In January, Aircel had stopped services in six circles to focus on well-performing areas. Aircel will be the fourth telecom provider to shut shop since the launch of Reliance Jio’s services in September 2016. Jio has aggressively undercut competitors by offering low tariffs. The Economic Survey highlighted in its findings that the telecom sector is going through a period of stress owing to growing losses and rising debt, amid heightened competition due to Jio’s disruptive entry. Norway-based Telenor is transferring its assets to Bharti Airtel for almost no charge. Bharti Airtel is also taking over the wireless business of Tata Teleservices. The wireless assets of Reliance Communications are being acquired by Jio.

In July 2016, before the launch of Jio, 79% of Aircel’s subscribers were active on the network and the company had a quarterly operating profit of Rs 120 crore. By December 2017, Aircel’s active customers fell to 57% at nearly half the average revenue per person and a quarterly operating loss of Rs 120 crore.

In April 2017, the company had initiated talks for a merger with Reliance Communications. However, delays in approvals and a Supreme Court order preventing a sale of Aircel’s spectrum stopped the merger.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

By Rahul Rai and Shruti Aji Murali A little less than a year since their release, the Consumer Protection (E-commerce) Rules, 2020 is being amended....

News

By Anand Venkatanarayanan                         There has been enough commentary about the Indian IT...

News

By Rahul Rai and Shruti Aji Murali The Indian antitrust regulator, the Competition Commission of India (CCI) has a little more than a decade...

News

By Stella Joseph, Prakhil Mishra, and Surabhi Prabhudesai The recent difference of opinions between the Government and Twitter brings to fore the increasing scrutiny...

News

This article is being posted here courtesy of The Wire, where it was originally published on June 17.  By Saksham Singh The St Petersburg paradox,...

You May Also Like

News

Although user growth grew considerably in this quarter, the company faced challenges due to the pandemic and subsequent economic disruptions to the supply chain....

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ