News: Aircel finally files for bankruptcy

Employee Relations

Aircel finally files for bankruptcy

Aircel, which is the smallest mobile operator in the country, has finally filed for bankruptcy.
Aircel finally files for bankruptcy

As was previously reported by People Matters, Aircel, which is the smallest private mobile operator in the country, was considering filing for bankruptcy. It has today done so. The company is debt-ridden by 15,000 crore and when the Maxis (the Malaysian which owns Aircel), failed to establish a truce between the shareholders and lenders, the company decided to file bankruptcy. As reported, the company had been trying to get funding to help ease the debt, but the talks did not go through. The company had also tried to invoke a Strategic Debt Restructuring scheme in January 2018, but an agreement could be reached, primarily, because the banks could not restructure the loan because of non-payment by Aircel.

Aircel with its units - Aircel Cellular, and Dishnet Wireless has filed for bankruptcy in the National Companies Law Tribunal NCLT - Mumbai on Wednesday.

It is though not just the lender that faced the issue of non-payment, but service providers like Vodafone and  Idea Cellular. The later has already snapped ties with the operator, Vodafone is reported to follow suit.

According to the statement given by Aircel to the media, “The Board of Directors 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. This has caused significant negative business and reputational impact on the company.”

It is not only Aircel which has been affected by the entry of Reliance Jio, but media report also states that Telenor is transferring its assets to Airtel, and Tata Teleservices has shut down. Reliance Communications’ wireless assets are being brought by Jio.

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Topics: Employee Relations, #Jobs

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