KUALA LUMPUR: Maxis Communications Bhd’s 74 per cent-owned Aircel Ltd is filing for bankruptcy at the National Company Law Tribunal (NCLT), India’s Economic Times quoted sources as saying.
Maxis Communications, run by businessman Ananda Krishnan, had earlier proposed a cash infusion to support the debt-laden company but has pulled the plug, the report said.
The company has been in negotiations with lenders since September but has failed to hammer out a recast of its Rs15,500 crore (RM9.48 billion) debt.
“There is no cash to run the business and no visibility to free any more up,” the report quoted a source as saying, adding that the company is likely to stop paying salaries by the end of the week.
The report, quoting one of the sources, said the decision was precipitated by the Reserve Bank of India scrapping all debt revamp schemes in favour of the Insolvency and Bankruptcy Code and seeking to hasten resolution.
Having not made payments since September, banks can no longer restructure Aircel without provisioning for its debt, it said.
“They are currently in the process of nominating members to a new board and an insolvency professional to run the process. The application to NCLT is expected to be made in a few days.
“The lenders are scheduled to meet on Tuesday to decide on appointments and the future course of action,” the report said.
Last month, Economic Times reported that Aircel had entered into a strategic debt restructuring (SDR) process after lenders led by the State Bank of India agreed to convert debt into equity.
The report quoted sources as saying that the banks would take shares in Aircel to replace their loans.
Aircel has about Rs15,500 crore of borrowings on its books, with sustainable debt estimated at Rs 5,500 crore, which would entail a recast of Rs 10,000 crore.
It was reported earlier that Maxis Communications was likely to pump in US$500 million into Aricel, contingent on the SDR loan conversion going through.