The National Company Law Tribunal (NCLT) on Tuesday approved a resolution plan of erstwhile telecom operator Aircel, ET Telecom reports. UVARCL, an asset reconstruction firm is said to be the shortlisted buyer for Aircel’s assets. In February, the asset reconstruction company proposed a resolution plan worth Rs 6,630 crore. The publication citing “people aware” of the development said that the NCLT Mumbai bench “approved the plan but with some modifications.” Aircel, a former telecom operator in India commenced its operations in 1998 and filed for bankruptcy in 2018. The operator had a significant presence in south India before choosing to expand its operations on a pan-India scale.
Aircel Spectrum Valid Till 2026
ET Telecom reports that the resolution plan might face hurdles in the form of the Department of Telecommunications who had filed claims worth Rs 10,000 crore. Deloitte, the resolution professional in the case is said to have approved Rs 2000 crore of the DoT’s claims.
UVARCL, the chosen buyer previously for Reliance Communications, is likely to bank on Aircel’s spectrum’s assets as part of the resolution plan. Aircel holds spectrum in nine circles including Andhra Pradesh, Delhi, Karnataka, Mumbai, Rajasthan with a validity until 2026. Aircel also has a 14,500 km long optical fiber network across India.
In 2018, it was reported that Aircel owes around Rs 27,000 crore to its creditors and vendors on a standalone basis. The company while taking the voluntary Corporate Insolvency Resolution Process (“CIRP”) said that it was “facing troubled times” due to “intense competition.”
“The Company would like to emphasize that CIRP is not a proceeding for liquidation, rather is a process to find best possible resolution for the current situation and that would be in the best interest of everyone,” Aircel said in a statement.
Maxis Lost US$7 Billion in Aircel
In 2016, Reliance communications and Aircel announced a merger of their telecom operations. However, the deal was pulled in mid 2017 due to regulatory and legal uncertainties. Maxis, a telecom major in Malaysia that acquired Aircel in 2005 has reportedly lost US$7 billion in its Indian venture.