Aircel lenders agree to take 99% haircut on dues worth Rs 20,000 crore

In an unprecedented move, the lenders to bankrupt Aircel, a mobile operator, have agreed to take a massive 99 per cent haircut on their dues worth Rs 20,000 crore by agreeing to a Rs 150-crore upfront offer by UV Asset Reconstruction Company (ARC).
The move may lead to litigation as some of the operational creditors are planning to challenge the committee of creditors’ (CoC's) decision in both local and US courts.

A source said the resolution plan was approved by 73.88 per cent (in voting share) of lenders and was rejected by Canara Bank and China Development Bank. State Bank of India, Syndicate Bank, Bank of Baroda, L&T Finance, Jammu & Kashmir Bank, Standard Chartered Bank, Punjab National Bank, Exim Bank, and Nordic Bank voted for the offer.
Aircel admitted itself to the National Company Law Tribunal (NCLT) in February 2018 even as all its directors resigned just before the bankruptcy filing.
According to the plan, the ARC will try to sell fibre, spectrum and telecom assets of the company to recover the bank dues. Aircel had shut its wireless services long ago and forfeited its customer base.
The company is currently conducting only part of its enterprise business and its employee strength stands reduced to just 200.
Like several telecom companies, Aircel lost its India business after the Supreme Court cancelled its pan-India wireless telephony licence in 2012.
A spokesperson of UV ARC declined to comment. The insolvency professional Vijay Iyer was not available for comment.
In another related development, some of the creditors who haven’t been paid are contemplating action in the US courts against its earlier promoter Maxis, which has given indemnities to local operational creditors.
GTL Infrastructure, which has made a claim of Rs 13,000 crore over the termination of its contract, is also likely to take appropriate legal action if this plan gets implemented, said a source. GTL Infrastructure has already moved the NCLT as an operational creditor.
Aircel’s fibre business of around 15,000 km is not that sizeable though it has presence in Jammu & Kashmir and the North East. Aircel also has under 2,000 towers (current valuations are at Rs 25 lakh a tower) and a total of around 85 MHz of spectrum, most of which is in the 2,100 band.

Aircel-Maxis case: ED files chargesheet against P Chidambaram under PMLA

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The Enforcement Directorate (ED) on Thursday filed a chargesheet in the Rs 35 billion Aircel-Maxis deal case naming former Finance Minister P Chidambaram and a few others.
The supplementary prosecution complaint was filed before a special court in the Patiala House Courts Complex.

The chargesheet named Chidambaram, S Bhaskararaman, the chartered accountant of Chidambaram's son Karti, Aircel Televentures Ltd, Augustus Ralph Marshall, a resident of Malaysia, and others as accused in the case under the provisions of the Prevention of Money Laundering Act (PMLA).
ALSO READ: INX media case: Chidambaram gets interim protection from arrest till Nov 29
The Central Bureau of Investigation (CBI) and the ED are investigating how Karti Chidambaram allegedly managed to get clearance from the Foreign Investment Promotion Board (FIPB) in the Aircel-Maxis deal when his father was the Union Finance Minister in 2006. 

Delhi court grants anticipatory bail to Chidambaram in Aircel-Maxis case

A court here on Monday granted protection from arrest till August 7 to former Union minister P Chidambaram in the Aircel-Maxis case filed by the CBI.
Special CBI Judge O P Saini granted the relief to the Congress leader after a plea was moved by him in the morning, seeking anticipatory bail in the case.

Chidambaram and his son Karti Chidambaram were named in the chargesheet filed by the Central Bureau of Investigation (CBI) in the case on July 19.
The agency had filed a supplementary chargesheet before the special judge, who had fixed it for consideration on July 31.
The CBI is probing as to how Chidambaram, who was the Union finance minister in 2006, granted a Foreign Investment Promotion Board (FIPB) approval to a foreign firm, when only the Cabinet Committee on Economic Affairs (CCEA) was empowered to do it.
The senior Congress leader's role has come under the scanner of investigating agencies in the Aircel-Maxis deal and the INX Media case involving Rs 3.05 billion.
In its chargesheet filed earlier in the case against former telecom minister Dayanidhi Maran, his brother Kalanithi Maran and others, the agency had alleged that Chidambaram had granted an FIPB approval in March, 2006 to Mauritius-based Global Communication Services Holdings Ltd, a subsidiary of Maxis.
The Maran brothers and the other accused named in the CBI chargesheet were discharged by the special court, which had said the agency had failed to produce any material against them to proceed with the trial.
The Enforcement Directorate (ED) is also probing a separate money-laundering case in the Aircel-Maxis matter, in which Chidambaram and Karti have been questioned by the agency.
Both Chidambaram and Karti have denied the allegations levelled against them by the CBI and the ED.

Ex-Aircel promoter Sivasankaran's cos, top bankers booked in Rs 6-bn fraud

The CBI has registered a case against former Aircel promoter C Sivasankaran's two companies and MDs and CEOs of Syndicate Bank and Indian Bank for allegedly defaulting on loans worth Rs 6 billion taken from IDBI Bank, officials said on Thursday.
Sivasankaran's firms had allegedly taken a loan of Rs 5.3 billion in February 2014. The amount increased to Rs 6 billion after becoming a non-performing asset, they said.

Former IDBI CMD Kishor Kharat, presently MD and CEO of Indian Bank, and Syndicate Bank MD and CEO Melwyn Rego, who was Deputy MD of IDBI Bank, have also been booked by the CBI in the case, the officials said.
They said the agency carried out searches at 50 locations, including the residences of former senior IDBI Bank officials.
The searches were spread across Delhi, Faridabad, Mumbai, Gandhinagar, Chennai, Bangalore, Belgaum, Hyderabad, Jaipur and Pune, the officials said.
The case was registered under sections relating to criminal conspiracy, cheating and corruption against British Virgin Islands-based Axcel Sunshine Limited on allegations of perpetrating fraud through the loan accounts of Win Wind Oy, Finland and Axcel Sunshine Limited, the officials said.
They said 15 senior officers of IDBI bank, including retired officials, and 24 private officials, including directors and chairmen, and their companies have been booked.

Aircel files for bankruptcy, says faced trouble after entry of a new player

Aircel has become the latest victim in the highly-competitive telecom market in the country with the operator along with its units Aircel Cellular and Dishnet Wireless filing for bankruptcy in the National Companies Law Tribunal (NCLT), Mumbai after its lenders and shareholders failed to reach a consensus with respect to the restructuring of its debt.
Aircel, majority owned by Malaysia-based Maxis Communications, said 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.

With the entry of Reliance Jio in September 2016, most of the telecom operators have seen their profitability plunge to new lows. The market has now consolidated to 4 private players along with state-run BSNL and MTNL and soon there will be 3 as Vodafone and Idea Cellular are merging together. Intense competition and low tariffs have forced the Indian telecom sector to consolidate in a bid to survive.
The sector, which a few years ago, had around a dozen mobile operators, has been now reduced to a few big players as the smaller telcos have either merged or shut shop. The first major setback for the sector came in 2012 when Supreme Court cancelled 122 telecom licences. Another disruption came in September 2016 with the launch of services by Reliance Jio. The dirt cheap tariffs of Jio forced other telcos to match pricing leading to drop in profitability.
Getting a sense about the financial condition of telecom players after Jio's entry, Airtel got Telenor and Tata Teleservices virtually free of cost.
Reliance Communications (RCom) was forced to shut its wireless business whereas its assets have been bought by Jio.
Aircel said it has filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016 for undertaking Corporate Insolvency Resolution Process (CIRP). Aircel has a debt to the tune of Rs 190 billion which include deferred spectrum payments. The company said in 2016, it embarked upon a merger of its wireless business with RCom but on account of various issues and hurdles faced, the merger did not succeed and ultimately lapsed in September 2017.
As per sources, the fate of Aircel was sealed after Ananda Krishnan-led Maxis Communications decided not to infuse more funds in the company. The situation was further compounded after Supreme Court in January this year barred Aircel from selling or leasing its assets in a broader corruption case.
"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. Despite these discussions and the invoking of a Strategic Debt Restructuring scheme in January 2018 pursuant to the then guideline of the Reserve Bank of India, no agreement could be reached," Aircel said in a statement.
It further added under the current circumstances, especially after the February 12 RBI guidelines, the company believes resolution process under the code is an appropriate recourse.
As per rules, Aircel will be placed under a court-appointed insolvency resolution professional, who will get 180 days that can be extended by another 90 days to work out a repayment plan. If no plan is agreed during the 270 day period, the company will be declared bankrupt and will be liquidated.
Aircel emphasized that CIRP is not a proceeding for liquidation, rather is a process to find a best possible resolution for the current situation and that would be in the best interest of everyone (vendors, distributors, employees, etc.) to protect and preserve the value of the company and manage the operations.
Aircel further said it requests continued services from the suppliers and partners for the ongoing business of the company.