Economy

UVARCL gets NCLT nod to take over Aircel

Our Bureau Mumbai | Updated on June 09, 2020

In the first step towards the resolution of defunct Aircel, the National Company Law Tribunal (NCLT), Mumbai, has approved the takeover of its assets by UV Asset Reconstruction Company Ltd (UVARCL).

The approval came on Tuesday, and following which the asset reconstruction company has to get approvals from the Department of Telecommunications and the Supreme Court.

UVARCL, which had only placed bids for the mobile business, can now bid for Aircel’s remaining businesses, bulk SMS and enterprise businesses.

Aircel, which owes about ₹20,000 crore to a clutch of 12 financial institutions, was being managed by a Resolution Professional (RP).

In May 2019, the Committee of Creditors (CoC) of beleaguered telecom operator Aircel had approved the partial liquidation of the company, which did not include its bulk SMS and enterprise businesses.

UVARCL had offered Rs 150 crore as upfront payment, with proposals for additional funding on successful running of the businesses.

The lenders had reached an agreement to take a haircut of about 80-85 per cent for the entire compnay, which included both its mobile and enterprise businesses.

Following the “agreed haircut”, about 50 per cent of the remaining amount would be assumed as debt by the ARC and the balance will be converted into equity. ALSO READ: Aircel headed for partial liquidation

LENDERS’ CHART

The State Bank of India has the biggest exposure of 36.6 per cent, followed by Punjab National Bank at 15.1 per cent, China Development Bank Corporation 13.7 per cent and Bank of Baroda 10.5 per cent. Canara Bank, Nordic Investment Bank, AB Svensk Exportkredit, Exim Bank and Syndicate Bank are the other lenders to Aircel.

On February 27, 2018, Aircel filed for bankruptcy protection with the NCLT in Mumbai after its Malaysian promoter Maxis Communications decided against pumping additional funds into the company. The tribunal admitted Aircel’s application on March 12, 2018, and appointed the Resolution Professional (RP).

In April last year, Maxis Communications infused an additional ₹95 crore in Aircel to enable the telecom operator pay salaries and meet certain expenses. The move — which was more of a goodwill gesture than an investment — came after the Malaysian parent declined in February to provide any more funds. ALSO READ: Maxis gives ₹95 crore to Aircel to pay staff salary

RCom is other Insolvency and Bankruptcy Code petition being heard by NCLT, in which UVARCL a bidder.

Published on June 09, 2020

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