India’s National Company Law Tribunal (NCLT) has accepted Aircel’s bankruptcy petition, paving the way for an ‘ Insolvency Resolution Professional ( IRP)’ to be nominated, the Economic Times writes. Whilst Aircel has requested an urgent appointment of an IRP to resolve issues relating to continuation of services, repayment of loans and payment of salaries, the company’s financial and operational creditors have begun fighting over the company’s future as they seek to recover their share of Aircel’s INR500 billion (USD7.7 billion) debt pile. Tower firm GTL Infrastructure – which is attempting to recover dues totalling between INR8 billion and INR10 billion – has appealed for a copy of Aircel’s bankruptcy petition to ensure that it does not violate a decision from the Delhi High Court earlier this year, which would prevent the sale or transfer of Aircel’s assets without a petition for such. Aircel’s financial bankers claimed, however, that in the case of liquidation they would need to recover their funds via the sale of Aircel assets. The operator estimates its spectrum and licences are worth around INR100 billion, whilst its tower and fibre assets are worth approximately INR220 billion. Aircel is currently involved in talks with operators and vendors to continue operating in an effort to minimise disruption to its customers, and preserve the company’s value.
In a similar development, Reliance Communications (RCOM) has experienced another setback in its attempt to resolve its own debt crisis. The provider, which closed down most of its wireless operations last year, was hit by a court order earlier this month in favour of operational creditor Ericsson which prevented the sale of the company’s assets. RCOM’s attempts to overturn that ruling haven fallen at the first hurdle, with the Bombay High Court dismissing the telco’s plea. RCOM has an existing deal in place to offload its tower, fibre and spectrum assets to Reliance Jio Infocomm (Jio) by the end of March that will roughly halve its INR450 billion debt burden. Ericsson is concerned that the sale will leave RCOM a shell, and it will be unable to recover the INR10.1 billion it claims it is owed. In the most recent hearing, Ericsson argued that RCOM’s behaviour amounts to fraud, noting that the company had ceased making payments in December 2016 and instead promised to clear all outstanding dues via asset sale. This, the Swedish vendor claims, shows that RCOM had no intention of paying its dues. For its part, RCOM noted that secured financial lenders have a higher priority for repayment than Ericsson, and the asset sale is in line with decisions made by those lenders. RCOM plans to appeal the most recent order, a spokesperson for the company was cited as saying.
Finally, the NCLT has approved the merger of Bharti Airtel with Telenor India. The deal has already been approved by the anti-trust watchdog, the Securities and Exchange Board of India (SEBI) and the national stock exchanges, and is now awaiting a green light from the Department of Telecommunications (DoT). Under the agreement, Airtel will take over Telenor’s mobile business including its spectrum, infrastructure and subscribers, in exchange for taking on the outstanding spectrum payments and operational contracts.