The National Company Law Tribunal (NCLT) expressed surprise that Aircel chose to file for bankruptcy on its own and said it admitted the telco’s plea because it believes there is potential to revive the business, given the company’s current revenue generation and over Rs 32,000 crore worth of assets, including spectrum.
The reasons were revealed in the detailed order passed by the tribunal in Mumbai on Monday, a few days after the Chennai-based company’s petition was admitted and Vijaykumar V Iyer of Deloitte was appointed as the insolvency resolution professional to inform the tribunal of the insolvency proceedings in a month.
“Prima facie it has also been demonstrated that there is a scope of revival of the company and also betterment in revenue generation… the applicant has therefore, expressed that under the supervision of experts and judicial body, the gross revenue generation shall be better in the months to come,” member MK Shrawat said in the order dated March 12, a copy of which was seen by ET.
Aircel told the tribunal that while its revenue had declined to Rs 515 crore in January from Rs 580 crore in December, the revenue of Aircel Business Solutions, its enterprise division, had increased to Rs 64 crore from Rs 57 crore in the same time.
“In addition to the scope of increase in revenue generation, it has also been demonstrated that the debtor company has enough valuable assets to satisfy the major portion of the outstanding debt,” the tribunal said. Aircel and its units previously said they have debt of Rs 50,000 crore. The NCLT order revealed that an amount of Rs 19,889 crore was owed to operational lenders as of February 20.
One of the operational creditors, tower company GTL Infrastructure, which filed to be party to the case to protect its dues of almost Rs 1,000 crore, has been allowed to lodge its claim with the resolution professional.
Aircel and units Dishnet Wireless and Aircel Cellular filed for bankruptcy after over four months of attempts to settle with lenders. By the time banks agreed to a strategic debt restructuring, the Reserve Bank of India had scrapped loan recast schemes and left Aircel with no option but to file for bankruptcy.
Although it may appear strange that a corporate body itself is taking steps to be declared insolvent, the answer is obvious because it sometimes becomes impossible to run a business due to the pressing demands of recovery by creditors, the tribunal noted.
Aircel told the tribunal that a resolution professional was needed urgently to help settle issues related to continuation of services, repayment of loans and payment of salaries.
Source: Economic Times