Telecom Department Unable to Recover Debt Upwards of Rs 6,000 Crore from Aircel

Aircel, the debt-laden bankrupt telco is right now going through a big crisis as it is struggling to pile up cash for repaying its dues. As a result, the Department of Telecommunications (DoT) has also given up on any chances of recovering a massive amount of Rs 6,000 crore along with any interest from the insolvent telecom operator. The Department is serious of the thought that the debt-ridden giant which is owned by Malaysia’s Maxis is not the in the position to repay the debt which it owes to the department. Not only this, the department doesn’t even think that the company will be able to repay the fraction of what it owes. It is noteworthy that Aircel owes north of Rs 19,000 crore just to its lenders, and in total it owes about Rs 50,000 crore to its operational and financial creditors.

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A senior official remarked “We have submitted our statement of claims to the interim resolution professional (IRP)… but it will take at least 2-3 years for the complete process which includes determining how much can they pay up and to who all, even after the cash comes.”

Right now, Deloitte’s Vijayakumar Iyer is heading the carrier as the Interim Resolution Professional. He said about the situation “The company will not come back. It (dues) will simply go into our books and their (creditors including banks) books.” This news was reported by ET.

To be specific, the telco owes the government a total sum of Rs 6,666 crores. Out of this total amount, Rs 722 crore stands secured by bank guarantees as part of One Time Spectrum Charge (OTSC). On the other hand, other charges like spectrum usage charge, license fee, interest and penalties are not covered by bank guarantees. Also, the OTSC dues have been challenged in the apex court where the decision is pending about the same.

The committee of creditors meeting, which on the last occasion witnessed the presence of DoT officials along with heads of businesses which are owned by Aircel – Dishnet Wireless and Aircel Cellular discussed at length about how the telco could be pulled out of the grim situation. In the meeting, the IRP remarked that the company would need Rs 200 crore of cash infusion right now in order to keep the operations going, maintaining the infrastructure and to pay salaries.

The IRP had also added that some bidders in the market might be interested in buying the assets of Aircel, however, by the time the deals have finalised, the costs of the assets are going to decline given the lack of maintenance. The enterprise business of Aircel has been expected to go up for sale first if this move happens.

The bankruptcy court had also added its thought to the decision saying that the enterprise business of the telco which was worth Rs 32,000 crore could help the company find its way out of the financial struggle. Perhaps by selling the towers, fibre and other assets the company might be able to blow back some life into the business.

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6 Comments on "Telecom Department Unable to Recover Debt Upwards of Rs 6,000 Crore from Aircel"

 

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AU(Airtel User)
June 25, 2018 2:03 pm 2:03 PM

Aircel will have to pay every single rupee to the GOVERNMENT. Government should sell out there offices and there assets and recover all money. Why do even these poor private companies come into business when they can’t repay there loans and debts back to government. These private companies even not paying distributors hard earned money. Both people and government have suffered due to these poor private operators.

Kaushik IMA
June 25, 2018 6:29 pm 6:29 PM
Biggest defaulter of public money till date is BSNL and MTNL. perpetually bleeding companies and every rupee spent is a loss. Now what happens with aircel is their assets were valued equivalent to the debt taken. But over time the assets have deprecated and hence selling everything off will not give the returns to any shareholder. Who is to blame for bad loans and NPA? Banks of course, especially Psus that are perpetually under loss and scams like SBI and PNB. Psus are the worst liability to India because psus are corrupt from top to bottom and this affects private… Read more »
Sangam Mishra
June 25, 2018 2:23 pm 2:23 PM

All Aircel offices are on rent & even asset like Computer & others asset also on rent. Aircel did not pay the 2 month salary of his employees

Chetan
June 25, 2018 1:31 pm 1:31 PM

I think liberised band 1 and band 3 spectrum alloted to Aircel will be pulled back by dot as they feel that dues will never be paid back… Aircel can land in catch 22 situation with this… I am surprised no mention on this in the article above… It shows this is half baked article doing rounds in media…

Kaushik IMA
June 25, 2018 6:30 pm 6:30 PM

There’s no catch 22, shutdown and liquidation is the only way forward for aircel.

Chetan
June 25, 2018 7:54 pm 7:54 PM

Liquidation of What Sir??? Read my comments again… Spectrum will not be allowed to traded if dues are not paid.. Rcom was on chopping table regarding spectrum trading when Banks decided to pay DOT dues in order to pull their bigger amount from sale… No towers of their own.. What they are left with is some pony enterprise business, fibre and nodes…. Thats it. How much money will it fetch?

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