Bharti Airtel, Reliance Jio and Investment Firms Finish Bidding for Aircel Assets Sale

By September 20th, 2018 AT 4:02 PM

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.

airtel-jio-aircel-assets-sale

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.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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Nikhil Mumbai-PuneRhishav (Kolkata)Vipin (Mumbai)Nikhil Mumbai - PuneKanaga Deepan N, Sivakasi (T.N.) Recent comment authors
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Kanaga Deepan N, Sivakasi (T.N.)
Kanaga Deepan N, Sivakasi (T.N.)

Chetan Bhai… I wonder how you missed the master stroke by Jio here. Even though Airtel is the highest bidder for spectrum, [1] Aircel recovery team wants to sell everything to singer buyer as its better deal comparing selling items to individual buyers. (U know who is the single buyer, right) [2] Jio is the ONLY bidder for towers. This proves clearly Jio is the ONLY single buyer, who is buying everything. This means, Jio is going to get Aicel spectrum, even after giving lesser quote for the same. But honestly, I dont want Jio to go for Band 1… Read more »

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

Airtel and Void has enough spectrum in band 1. Why they need more spectrum through auction(except Airtel in Kolkata circle)? There is no need for spectrum in band 1/3/5 to Avoid. They already have enough. Jio can acquire all from auction at base price only if Airtel gives all their spectrum in band 5. AIRTEL AND VoID have enough band 1 and band 3 spectrum in my honest opinion. Void needs band 40 spectrum but they won’t get it if Jio tries to drop the plan of band 1,Jio will go all blazing guns for 20Mhz PAN India in band… Read more »

Vipin (Mumbai)
Vipin (Mumbai)

@Nikhil. Spectrum is not available in B40 . Unless DOT gets it released from defense and other govt agencies. Chances are very less till next auction. Technically B40 has 100 Mhz bandwidth. Most circles 60 Mhz has been allotted. Considering number of subscribers and quantum of data being used, Jio would require much more that 10 MHz in Band 3, which is scarce. Yes, in B5 Jio can go for 20 Mhz. But this comes with huge cost. This is why Jio is in Trouble and i’m concerned of their planning. They started with bang but are in troubled waters… Read more »

Nikhil Mumbai - Pune
Nikhil Mumbai - Pune

DOT going to release 20Mhz Pan India from defense and other govt agencies before next auction. I guess they already have. 20Mhz is released from Band 41 as well. We need speeds. Band 5/3 will give you coverage not speeds.

Nikhil Mumbai - Pune
Nikhil Mumbai - Pune

I don’t feel voice quality of Jio is unreliable anywhere in Mumbai. I use Redmi Note 4. I have used Vodafone as well. Vodafone has good voice quality as well. Airtel have worst voice quality in Mumbai but speeds are great in Mumbai for Airtel.

Vipin (Mumbai)
Vipin (Mumbai)

For voice quality atleast call should get connected. In Jio, call itself (incoming or outgoing) doesn’t get connected at places where subscriber density is more. Data is also not stable. Myself and my friends gave up using Jio.

Rhishav (Kolkata)
Rhishav (Kolkata)

+1 I agree with Vipin. There are places in Kolkata top were calls don’t connect. Only solution for Jio is to install small cells to support the existing infrastructure otherwise people will just leave Jio.

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

I never faced any problems in Jio call quality. I have used it in RN4/One Plus 3T/5T/RN5/J7 Pro/S8+/S9+ . No problems whatsoever.

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

Airtel data works super fine in Mumbai. You can try that.

sanjay
sanjay

Their monopoles are small and fully occupied with 6 antennas in my city.

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