In the latest turn of events, the insolvent telco owned by Malaysia’s Maxis, Aircel has approached the Supreme Court and filed an appeal saying that neither the Department of Telecommunications and nor Bharti Airtel has obliged by the November 28 order and returned the Rs 453 crores worth of bank guarantees. The telco said that the same amount could be paid in cash by the two parties, and in the court, the bankrupt telco has requested for the issuance of a direction in line with the November 28 ruling. In its application to the court, the cash deficit telecom operator said that the delay in getting the guarantees has added to the company’s financial woes. The operator highlighted that the employees of Aircel had not been paid for five months and there is a lack of support to keep the company afloat. The newly filed case will be heard on January 4.
Aircel Not Getting Bank Guarantees Worth Rs 453 Crores
As informed by ET Telecom, the company right now is being run by a resolution professional from Deloitte following the Insolvency and Bankruptcy Code. Right now, it aims to generate enough cash flow to revamp operations, start making revenue and to sell its assets or businesses to pare its Rs 19,000 crore debt which it owes to the banks. Aircel along with its unit Dishnet Wireless also needs cash to pay for operational expenses and to clear its salaries to the employees.
Airtel Caught Up in Legal Battle
Back in 2016, Aircel had submitted bank guarantees worth Rs 453 to the Department of Telecommunications (DoT) to get its spectrum deal cleared with Bharti Airtel. However, as per the last order from the Supreme Court which overruled the order passed by the telecom tribunal, the DoT was to return the bank guarantees to Aircel. The order further instructed the government to pay Rs 298 crore in cash to the telecom operator which was paid to the department back in 2016 to get the spectrum deal cleared. The court order gave a buffer of eight weeks or till January 25 to DoT to pay the cash.
It’s worth noting that back in 2016, instead of submitting the bank guarantees itself, Aircel asked Bharti Airtel to provide bank guarantees worth Rs 453 crore on behalf of Aircel thus adjusting the amount in its Rs 3,500 crore spectrum sale deal. However, now the bank guarantees have lapsed, and it is upon Airtel to pay back Rs 453 crores to Aircel. Therefore, in its latest appeal to the apex court, the bankrupt telecom operator urged the SC to “direct the Department of Telecommunication to return the three bank guarantees forthwith and in terms of the order … or treat them as cancelled (and) direct Bharti Airtel and Bharti Hexacom to return the amount of Rs 453 crore withheld ... since 2016”.
Aircel Employees Showing Agitation
Aircel has also gone on record saying that the amount received would help in paying the salaries of 3,000 employees and would be crucial in keeping the company afloat. In its petition, Aircel said, “…the said the amount is critical to preserve the value of the appellant’s network and also undertake critical operations in its fight to stay afloat and will accordingly enable the resolution professional … to use the proceeds/monies towards paying, inter alia, statutory liabilities and employee salaries…”
The bankruptcy court has given Aircel till January 15 to resolve insolvency, failing which the company will be put up for liquidation. A team led by senior executives of the company have raised Rs 90 crores which is almost equal to the amount infused into the company by the parent company of Aircel, Maxis, back in April. In a related move, Aircel employees had approached RF Nariman on December 11 to say that they had to borrow money for daily survival and that they have not received salaries along with provident fund and gratuity.