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

By June 25th, 2018 AT 1:08 PM

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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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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