Mobile operator Aircel has announced filing of bankruptcy in view of mounting financial troubles and tough business environment. After failing in its attempt to merge business with Reliance Communications, the company said it could not reach consensus with respect to restructuring of debt and funding after discussions with lenders and shareholders. In its statement, Aircel said, “Despite these discussions and invoking of a Strategic Debt Restructuring in January 2018, no agreement could be reached.”
It has now filed an application under Section 10 of the Insolvency and Bankruptcy Code for undertaking Corporate Insolvency Resolution Process. Sources said the filing was made in National Company Law Tribunal, Mumbai. The company board has 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.”
It said this caused a significant negative business and an impact on the reputation of the company. Aircel has already informed regulator Trai that it has shut down operations in six circles - Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Maharashtra, and Uttar Prades, with effect from January 31 this year. Services also remain disrupted in other areas like Andhra Pradesh, Assam, Bihar, Delhi, Jammu & Kashmir, Karnataka, Kerala, Kolkata, and Mumbai. Aircel has a debt of around £1.55 billion, and a shrinking subscriber base. “The company would like to emphasis that CIRP is not a proceeding for liquidation, rather is a process to find best possible resolution for the current situation and that would be in the best interest of everyone to protect and preserve the value of the company and manage the operations,” Aircel said.
