Aircel lenders agree to take 99% haircut on dues worth Rs 20,000 crore

In an unprecedented move,  lenders to bankrupt telecom operator Aircel have agreed to take a massive 99 per cent haircut on their outstanding dues worth Rs 20,000 crore by agreeing to a Rs 150-crore upfront offer by UV Asset Reconstruction Company (ARC).

The move may lead to litigation as some of the operational creditors are planning to challenge the committee of creditors’ (CoC's) decision in both local and US courts. 

A source said the resolution plan was approved by 73.88 per cent (in voting share) of lenders and was rejected by Canara Bank and China Development Bank. State Bank of India, Syndicate Bank, Bank of Baroda, L&T Finance, Jammu & Kashmir Bank, Standard Chartered Bank, Punjab National Bank, Exim Bank, and Nordic Bank voted for the offer.

Aircel admitted itself to the National Company Law Tribunal (NCLT) in February 2018 even as all its directors resigned just before the bankruptcy filing. 

According to the plan, the ARC will try to sell fibre, spectrum and telecom assets of the company to recover the bank dues. Aircel had shut its wireless services long ago and forfeited its customer base.

The company is currently conducting only part of its enterprise business and its employee strength stands reduced to just 200.

Like several telcos, Aircel lost its India business after the Supreme Court cancelled its pan-India wireless telephony licence in 2012.

A spokesperson of UV ARC declined to comment. The insolvency professional Vijay Iyer was not available for comment. In a related development, creditors who haven’t been paid are contemplating action in US courts against its earlier promoter Maxis, which has given indemnities to local operational creditors.

GTL Infrastructure, which has made a claim of Rs 13,000 crore over the termination of its contract, is also likely to take appropriate legal action if this plan gets implemented, said a person with knowledge of the matter. GTL Infrastructure has already moved the NCLT as an operational creditor.

Aircel’s fibre business of around 15,000 km is not that sizeable, though it has presence in Jammu & Kashmir and the North East. Aircel also has under 2,000 towers (current valuations are at Rs 25 lakh a tower) and a total of around 85 MHz of spectrum, most of which is in the 2,100 band.

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