Indian billionaire T Ananda Krishnan’s Aircel has asked an Indian court to initiate bankruptcy proceedings as it’s unable to repay about 500 billion Indian rupees ($7.7bn) of dues.
The mobile carrier owes about 150bn rupees to secured financial creditors and the rest to operational unsecured creditors, including those who provided it goods and services, Janak Dwarkadas, a lawyer representing Aircel, told the Mumbai bench of National Company Law Tribunal on Monday. In addition, the company also has an unpaid interest amount totaling 5.79bn rupees, he said. The court will hear the petition on March 8.
The unit of Mr Krishnan’s Maxis Communications will be placed under an insolvency resolution professional, who will have as long as 270 days to work out a repayment plan, if the court agrees. If no plan is agreed on by the deadline, the company will be thrown into liquidation to repay dues. Aircel is the latest casualty as a bruising tariff war, escalated by the entry of richest Indian’s Reliance Jio Infocomm in 2016, rages on and the bank regulator chases down delinquent borrowers.
“There’s a sense of urgency here,” Dwarkadas told the court. Almost 6,000 employees at the company have not been paid their February salaries, he said.
Aircel chief executive Kaizad Heerjee did not immediately respond to a text message and a phone call seeking comment.
Companies backed by Mr Krishnan stand to lose almost $7bn they poured into Aircel over the past 12 years, people with knowledge of the matter said, after the carrier filed to start bankruptcy proceedings.
Aircel submitted its request on February 28, the first major company in the country to make such a move on its own as on previous occasions banks initiated bankruptcy proceedings. At least three companies including Bhushan Steel, Lanco Infratech and Essar Steel have entered bankruptcy proceedings with claims of more than 500bn rupees, according to the government’s Economic Survey 2017-18.