Lenders turn the heat on Aircel

Worried lenders to loss-making wireless telephony firm Aircel are looking at converting their debt with equity or moving the National Company Law Tribunal (NCLT) to recover their ~17,000-crore debt. The development follows the proposed merger with Reliance Communications (RCom) being called off in October. The lenders will meet this month to take a call on the company’s debt-restructuring plan. They have also asked the promoters to bring in ~4,000 crore of additional equity. Aircel has decided to exit six important circles in India to focus on its profitable circles.

Lenders to the Anil Ambani-controlled Reliance Communications (RCom) have received bids for the assets of the ailing entity, under heavy debt. The assets put on the block are in telecom and real estate.

Its earlier plans for merger with Aircel and sale of its tower business to Brookfield have not succeeded. It was looking to monetise real estate assets in the Mumbai region and Delhi to repay and bring down debt.

Senior public sector bank (PSB) executives said their consortium had received bids for the assets and these would be processed. RCom is already under a Strategic Debt Restructuring plan, signed in June. The lenders' consortium, led by State Bank of India, have to decide on converting part of the debt into equity by the end of this month.

A PSB official said the issue of conversation of debt and the strategy to deal with insolvency suits filed by China Development Bank against the company would be taken up in a meeting scheduled next week. The Chinese bank had filed a case on November 28 under the Insolvency and Bankruptcy Code. Credit rating agency Fitch has also withdrawn its ratings for RCom.

The company has announced various asset sales and a comprehensive debt resolution plan. “Accordingly, for the time being, no payment of interest and/or principal is being made to any lenders and/or bondholders of the company.”

RCom’s assets put on the block are in telecom and real estate