India’s sixth largest telecom operator Aircel has filed for bankruptcy after Malaysia owned Maxis company failed to reach an agreement with its lenders and shareholders. Aircel said in a statement that despite the petitioning of a Strategic Debt Restructuring scheme in January 2018, following the guidelines of the Reserve Bank of India, no agreements were reached.
"Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to the restructuring of its debt and funding," said Aircel in its statement.
On February 19, 2018, the Economic Times had reported that the Rs 15,500 crore debt-laden telecom operator will be filing for bankruptcy. "The Board of Directors acknowledged that it has been facing troubled times in a highly financially stressed industry, owing to intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses. This has caused significant negative business and reputational impact on the Company," said the operator to media outlets.
Sources speaking to ET said that the parent firm, which is run by Ananda Krishnan, had pulled the plug on Aircel’s funding and that caused more problems. Aircel’s closure will affect tower firms, distributors, vendors and employees.
If the Indian tribunal accepts Aircel’s request, the company will be under an insolvency resolution professional for 270 days. During that time, the company will have to plan out a repayment plan. If the plans are not agreed upon by the stated deadline, the company will be declared as bankrupt and will be liquidated.