Malaysia’s Maxis owned, Aircel had to face the tough front of insolvency this year after facing brutal competition from the entry of Reliance Jio Infocomm into the market in 2016. Now to pare off its debt to financial and operational creditors, the company is looking forward to selling its assets to the highest bidder. Among the takers for Aircel assets, Bharti Airtel, Reliance Jio, Sterlite Technologies and two other investment firms seem to be in line. Two people aware of the matter said that the lenders of Aircel, however, believe that a lump sum sale to a single buyer would result in a much better deal.
Aircel Wishing to Sell to a Single Buyer
One of the people mentioned above to Livemint that although the bids have been received and the bidding closed on Monday, talks are going on about selling the assets to a single buyer which would result in a better price. The person said, “In a couple of days, these talks should happen. We are hoping to get over Rs 25,000 crore from asset sale proceeds.” It’s noteworthy, that Aircel Cellular Ltd and Dishnet Wireless Ltd, together known as Aircel, owe Rs 15,545 crore to financial creditors, and approximately Rs 35,000 crore to operational creditors.
Also, in October last year, things went downhill for Aircel when Reliance Communications didn't give heads up to the asset merger deal with Aircel citing legal and regulatory discrepancies. RCom had said, that there was also, “intervention of vested interests to derail the deal”. Following the sabotage of this deal, Aircel filed for bankruptcy in February citing reasons like unsustainable high debt and widening losses.
Widening Losses Pushed Aircel to Insolvency
As per Aircel’s lawyer, the company’s assets are worth Rs 32,362 crore and it holds 65 MHz spectrum in the 2,100 MHz band, 103 MHz spectrum in the 1,800 MHz bands, and 21 MHz spectrum in the 900 MHz band. However, the specifics of other assets like fibre and towers and remain unknown. The sale of assets if goes north of Rs 25,000, would mean a sigh of relief for the financial lenders of Aircel including State Bank of India, Punjab National Bank and Bank of Baroda.
Lenders Pleased with the Pricing
As per a report by Livemint, the sole bidder of Aircel’s spectrum asset is Bharti Airtel whereas the only bidder for the telecom towers is Reliance Jio. Along with that, firms like I Squared Capital, and distressed asset fund Aion Capital also remain behind them as bidders for Aircel’s assets. The second person among the above two mentioned sources, said “Deloitte is very happy with the outcome, which exceeded everyone’s expectations. We will know final decisions on winners probably in four weeks’ time... the bids were being opened on Wednesday.”
Back in April in 2016, Airtel had announced buying spectrum worth Rs 3,500 crore from Aircel in circles of Tamil Nadu (including Chennai), Bihar, Jammu and Kashmir, West Bengal, Assam, the North-East, Orissa and Andhra Pradesh. Also, in 2010, Chennai Network Infrastructure Ltd, a unit of GTL Infrastructure Ltd had bought 17,500 towers and 21,000 tenancies from Aircel for Rs 8,000 crore.