Airtel, Jio, Sterlite Tech place bids to acquire assets of Aircel
MUMBAI/NEW DELHI: Bharti Airtel Ltd, Reliance Jio Infocomm Ltd, Sterlite Technologies Ltd and two investment firms have bid to separately purchase assets of Aircel Ltd but lenders to the bankrupt telecom operator may still have to take a large haircut.
Lenders to Aircel are, however, keen on a lump sum sale to a single party as it believes such a move would lead to the best outcome, two people with knowledge of the matter said. Both declined to be named.
The bids have been received. But we are thinking of the possibility of a lump sum sale, that is give all of the assets to a single party. This should get better value for the assets,” said one of the two people cited above. “In a couple of days, these talks should happen. We are hoping to get over Rs 25,000 crore from asset sale proceeds,” the person said.
Aircel Cellular Ltd and Dishnet Wireless Ltd, together known as Aircel, owe about Rs 50,000 crore to creditors. The companies owe Rs 15,545 crore to financial creditors, and about Rs 35,000 crore to operational creditors. Bids for the assets closed on Monday.
Hammered by intense competition in the domestic telecom market, Aircel’s woes multiplied with the entry of Reliance Jio Infocomm Ltd in September 2016 with free calls and cheap data.
Things turned sour last October when Reliance Communications called off plans to merge its wireless business with Aircel, citing legal and regulatory uncertainties as well as “intervention of vested interests to derail the deal”.
In February, Aircel filed for insolvency citing high unsustainable debt and increased losses.
Aircel holds 65 MHz spectrum in 2100 MHz band, 103 MHz spectrum in 1800 MHz band, 21 MHz spectrum in 900 MHz band. Details of other assets such as fibre and towers could not be ascertained immediately.
The assets, including spectrum licences and fibre, are valued at about Rs 32,362 crore, Aircel’s lawyer said on 9 March.
A potential raising of more than Rs 25,000 crore from the sale of Aircel’s assets would lead to a massive haircut to its lenders such as State Bank of India, Punjab National Bank and Bank of Baroda.
India’s second-largest telecom operator, Bharti Airtel is the sole bidder for Aircel’s spectrum assets, while Jio is the sole bidder for the telecom towers, a second person aware of the development said.