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Aircel lenders approve UV ARC\'s bid, to get less than 1% of dues
Photo Credit: VCCircle

UV Asset Reconstruction Company Ltd has received approval of the lenders to Aircel Ltd to buy the debt-laden telecom company as well as its units Aircel Cellular Ltd and Dishnet Wireless Ltd for Rs 150 crore, a person familiar with the development said.

The development comes two-and-a-half months after VCCircle reported that Delhi-based UV ARC had emerged as the front-runner to buy the telecom operator.

The Committee of Creditors (CoC) of Aircel approved UV ARC's offer with a nearly 74% vote, the person said, asking not to be named. UV ARC will pay the entire amount upfront.

Aircel owed Rs 19,788 crore ($2.79 billion) to its financial creditors as of February this year. Since UV ARC is paying Rs 150 crore, this means lenders will take a haircut of over 99%.

Distressed asset management firm Eight Capital, which was the only other contender in the fray for Aircel, opted to withdraw its bid earlier this year.

The person cited above said UV ARC's proposal was rejected by Canara Bank and China Development Bank. However, 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 in favour of the offer by UV ARC, the person said.

However, some operational creditors may challenge the decision, the person said.

Billionaire T Ananda Krishnan's Aircel owes around Rs 35,000 crore to its operational creditors.

Aircel, which is majority-owned by Malaysia’s Maxis Communications Bhd, was undergoing corporate insolvency resolution process. The process was being run by insolvency resolution professional Vijaykumar Iyer of Deloitte.

Aircel had filed for bankruptcy in February 2018 after merger talks with Anil Ambani-led Reliance Communications fell through a few months before. Reliance Communications is also undergoing bankruptcy resolution.

Aircel's assets were valued around Rs 32,300 crore, inclusive of spectrum licences. It needs to be seen what assets can be liquidated and what amount UV ARC can derive from the assets.

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