Aircel Working on an Alternative Business Model if the Proposed Merger With RCom Does Not Get Required Approvals on Time: Report

It is already a known fact that Aircel and Reliance Communications (RCom) are gearing up to form a merged entity in the country. However, a new report now claims that Aircel is considering an independent restructuring of its Rs 20,000-cr debt as one of the options for continuing operations on its own if it does not receive necessary nods from the regulators.

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A report from Economic Times says that the operator has approached financial consultants to explore such restructuring of the business. “The carrier, whose majority is owned by Malaysia’s Maxis, has approached financial consultants to explore such are structuring and has sought advice on whether it could use insolvency or debt recast to cut debt and continue as a niche player in a limited number of circles,” cites the report.

Furthermore, in a recent internal meeting of Aircel, Kaizad Heerjee, the Aircel chief executive has advised the Aircel finance, human resources, and technology heads to work on a plan if the merger doesn’t work out.

Irrespective of these claims, both RCom and Aircel are committed towards the merger and will give their 100% to get the required approvals. “Aircel’s moves come as the two telcos are running against time to get the merger cleared by authorities, including the National Company Law Tribunal(NCLT),” says the report.

Recently, NCLT confirmed that it would hear on August 14 whether to admit the merger petition for consideration. Aircel’s move doesn’t come as a surprise because the telcos are running out of time.

Moreover, both RCom and Aircel have already confirmed in June that the merged entity would be called as AirCom, and the proposed transaction is said to be completed by December 2017. With the deal of Aircel, the Anil Ambani-led RCom is looking to reduce its debt by Rs. 20,000 crores from Rs. 45,000 crores.

Also, Aircel and RCom and steadily losing consumers every month, with Aircel being on the majority losing side. After the proposal of merger, Aircel has lost more than one million subscribers, and the count will increase with every passing month.

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3 Comments on "Aircel Working on an Alternative Business Model if the Proposed Merger With RCom Does Not Get Required Approvals on Time: Report"

 

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[…] the merger itself, Aircel was reported in working on an alternate business model if the merger calls off, and the company is now implementing that business model. That said, these new tariff plans from […]

Kunal
August 12, 2017 7:34 am 7:34 AM

Nothing will work in telecom sector untill u have deep pockets……with existing network, aircel is way behind in coverage & quality….it is impossible for aircel to compete against jio & others ….aircel can not poach high arpu customers…….better to sell off at the earliest & get decent valuation.

Titan
August 11, 2017 6:27 pm 6:27 PM

Apply for bankruptcy along with RCOM so is the case for TaTa Teleservices

JioPhone is coming

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