Beleaguered Indian operator Aircel could be liquidated in the wake of its failure to sell off assets.
The operator has also been unable to convince its creditors to approve debt reduction proposals that would allow it to fulfil outstanding salary payments – indeed, its inability to reach a debt repayment agreement with its lenders was the catalyst for the operator’s bankruptcy filing in March.
After being approved by the National Company Law Tribunal, Aircel’s insolvency proceedings have now passed their halfway mark. However, with a hefty INR500 billion ($7.3 billion) debt, concerns that the company could be liquidated have been ramping up.
Aircel’s creditors - Bank of Baroda, Punjab National Bank and State Bank of India - shot down the operator’s proposal to sell off its fibre optic network. The operator intended to use the proceeds to pay off salaries for around 3000 workers that have been due since March this year.
The Economic Times quoted an unnamed executive as saying: “The situation is very grim since only few days are left and there is no sign of any asset sale. Questions are being raised if enough is being done for the asset monetisation programme.”
Aircel’s assets – including its enterprise business, towers and spectrum – were a key factor in its bankruptcy protection request being granted, as it was noted that they could help the operator’s finances.
Deloitte’s Vijaykumar Iyer has been appointed as the interim resolution professional for Aircel’s bankruptcy proceedings, and is currently halfway through the 180 day process. The possibility exists of a further 90-day extension, but if no resolution is achieved then the liquidation process will begin.