Five parties bidding for Aircel assets

PETALING JAYA: Five parties have bid to separately purchase assets of mobile service provider Aircel Ltd, which filed for bankruptcy earlier this year, according to reports.

Livemint reported that Bharti Airtel Ltd, Reliance Jio Infocomm Ltd, Sterlite Technologies Ltd and two investment firms have bid to acquire the assets, but lenders to the Indian mobile carrier may still have to take a large haircut.

It said the lenders, however, preferred selling the total assets to a single party, as it “believes such a move would lead to the best outcome”, the report said, quoting two people with knowledge of the matter.

“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. In a couple of days, these talks should happen.

“We are hoping to get over 25,000 crores from asset sale proceeds,” the sources were quoted as saying.

Bids for the assets closed on Monday. The report said raising 25,000 crores from the sale of Aircel’s assets would still lead to a massive haircut to its lenders, which include State Bank of India, Punjab National Bank and Bank of Baroda.

India’s second-largest telecom operator, Bharti Airtel, is said to be the sole bidder for Aircel’s spectrum assets, while Reliance Jio Infocomm is the sole bidder for the telecom towers, it said.

Aircel, which is 74% owned by Maxis Communications Bhd, reportedly owes about 50,000 crores to its creditors.

Aircel is among the casualties of the intense competition in the Indian telecom market.

Three years ago, India had over eight mobile telecommunications companies.

The entry of Mukesh Ambani’s Reliance Jio into the market a year ago created intense competition with its disruptive pricing.

Reliance Jio rapidly gained market share in India, kicking several of its competitors out of the picture.

In October, Reliance Communications called off plans to merge its wireless business with Aircel, citing legal and regulatory uncertainties, making things worse for the company.

Aircel has tried unsuccessfully to restructure its debt, and is said to be the fourth telco to wind up after Reliance Jio’s entry.

In February, Aircel filed for insolvency, citing high unsustainable debt and increased losses.