04:50 am - Thursday 27 April 2017

Report: Aircel appoints SBI Capital to refinance its Rs 19,500 crore loan

By insightVAS - Mon May 20, 3:35 pm

To refinance or reschedule repayment of Rs 19,500 crore loan, telecom operator Aircel has appointed SBI Capital. The operator had taken the loan to build its network and buy 3G and 4G spectrum.

The company is under Central Bureau of Investigation (CBI) scanner due to its financial problems. It had also postponed the launch of 4G services earlier scheduled for 2012-end in the eight circles where it has spectrum. Though the company has spent a substantial Rs 13,500 crore on acquiring spectrum Rs 10,000 crore on 3G and Rs 3,500 crore on broadband wireless access it would not require a corporate debt restructuring (CDR) package, which entails concessions from banks, yet.

(Malaysias) Maxis (co-owner of Aircel) has already brought in more money this year, as all the loans are tied with promoter bringing in more cash to the table, said a banking source to the news source. The company has not reached the CDR cell, the source added.

SBI Caps mandate is to find solutions for refinancing the loans, so that the company can reduce its interest burden and repay to a consortium led by State Bank of India. Sources say it could also look at rescheduling the loans, which would be tied with generation of surplus cash, based on new anticipated cash flows.

When contacted, an Aircel spokesperson said to the news source: We are doing all it takes to develop Aircel into a leading brand in the Indian telecom industry. We are very positive and are heading in the right direction.

Insiders say Aircel has also been looking at splitting the company into two entities one to be the operating company and the other the network firm.

Aircel, owned by Malaysias Maxis and the Reddys of Apollo Hospitals, operates in all of Indias 22 telecom circles. But it has failed to make money in the country so far.

Earlier, there had been speculation that Aircel could be looking for a buyer. However, its previous Managing Director Sandip Das had told the news source the company was open to going for a strategic partnership that could include having financial investors but promoters would continue to hold a majority stake.

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