Delhi, Feb 28: Telecom operator Aircel today said it has filed for bankruptcy as the company has been facing “troubled times” in “highly financially stressed” industry.
In a statement here, Aircel said that intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant “negative business and reputational impact” on the company.
“The Board of Directors of the Corporate Debtor today announced that they have filed an application under Section 10 of the Insolvency and Bankruptcy Code 2016 for undertaking Corporate Insolvency Resolution Process for the respective companies: Aircel Cellular, Dishnet Wireless, Aircel Ltd,” the the statement said.
Sources said that the filing was made in National Company Law Tribunal (NCLT) Mumbai.
The company statement also noted that efforts to merge wireless business with another operator did not yield any results and had ultimately lapsed in September 2017.
“Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to restructuring of its debt and funding. Despite these discussions and the invoking of a Strategic Debt Restructuring scheme in January 2018…no agreement could be reached,” Aircel said.
The company also said it believes that in the current circumstances, resolution process under the Insolvency and Bankruptcy Code is an “appropriate recourse”.
“The Company would like to emphasise that CIRP is not a proceeding for liquidation, rather is a process to find 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,” it added.
Aircel said it will strive to provide uninterrupted service connectivity to its customers and sought their support in the “current difficult period”.
Meanwhile, regulator TRAI has issued direction to troubled Aircel, granting it additional time and porting codes to enable its customers to shift to other networks.
In its direction, the Telecom Regulatory Authority of India (TRAI) noted that due to disruption of services in the licenced services areas including Andhra Pradesh, Assam, Bihar, Jammu and Kashmir, Karnataka, Kerala, Mumbai and Punjab, "a large number of subscribers both prepaid and postpaid are being inconvenienced and facing difficulties in porting their mobile number to other service provider".
TRAI has given direction for allotment of additional port out codes to the operator to enable a smooth migration of subscribers to other networks.
The operator has been allotted these codes for 45 days, and TRAI has asked Aircel to keep it posted on the number of customers who have ported out and also monthly subscriber-wise information of unspent balances.
Aircel, which had earlier informed the regulator about closing services in six other circles, last week approached TRAI highlighting the financial difficulties it is facing.
In its letter dated February 22, Aircel said it is undergoing "deep financial stress" and the recent reports that it may file for bankruptcy have created a "chaotic situation" with its subscribers, distributors and retailers and partners.
Aircel also sought extension in the validity of additional port out codes to enable subscribers to move on to other networks without changing their number under mobile number portability.
Aircel, in its letter to TRAI, also said it has been severely impacted by a major infrastructure provider shutting off as much as a third of its total sites in different circles or telecom service areas across the country.
"As an emergency measure, we are working out intra circle roaming arrangements with other telecom service providers to help our subscribers remain connected (keeping the criticality of mobile connectivity which is linked to a host of other essential services) and also that they may opt for porting if they choose to...," Aircel had said