UVARCL to sell Aircel spectrum

19 Jun 2020

UV Asset Reconstruction Company Limited (UVARCL), the firm set to take majority ownership of bankrupt former mobile operator Aircel, expects to raise between INR9.5 billion and INR15.1 billion (USD124.8 million and USD198.4 million) through the sale of the company’s assets, the Economic Times writes, citing a National Company Law Tribunal (NCLT) order. As part of the defunct cellco’s bankruptcy proceedings UVARCL will take 74% ownership of the company, and will aim to repay creditors INR66.3 billion – of the INR587.6 billion claimed – over the next five years. The NCLT notes that UVARCL’s offer was ‘much higher than any expected liquidation value’ of Aircel and its subsidiaries, which had been estimated at around INR8.7 billion.

UVARCL expects to generate INR8 billion and INR13 billion from the sale of Aircel’s 1800MHz and 2100MHz spectrum rights, but will need approval from the Department of Telecommunications (DoT) to do so. The DoT has previously opposed any such sale, claiming that it alone may sell spectrum rights, but the NCLT order allows for the transfer of Aircel’s frequencies on the basis that the DoT has been present at all creditor meetings and that no objections had been raised against the current resolution plan. Aircel’s fibre infrastructure, meanwhile, is expected to fetch between INR500 million and INR600 million, while additional funds totalling INR7.5 billion will be reclaimed from the DoT and Bharti Airtel.

UVARCL plans to spend roughly INR40 million on restarting business operations at Aircel, including data centre services, bulk SMS and the leasing of tower infrastructure. The company expects earnings from these streams to reach INR690 million in the first year, INR960 million in the second and INR1.3 billion in the third.

India, Aircel, Department of Telecommunications (DoT)