Aircel seeks to get its Rs 19,500-cr sticky loans refinanced

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

The company, which is facing financial problems, has been under the Central Bureau of Investigation (CBI) scanner, too. 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. 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: 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. For the first half of the 2012 calendar year, it posted a loss of Rs 724 crore in its Rs 3,898-crore income. During the previous calendar year, Aircel had incurred a massive consolidated net loss of Rs 6,247 crore on a total income of Rs 6,651 crore, compared with a net loss of Rs 2,868 crore on a total income of Rs 7,642 crore in 2010 (including Rs 1,800-crore profit from tower sale).

Earlier, there had been speculation that Aircel could be looking for a buyer. However, its previous managing director Sandip Das had told Business Standard 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.

UNDER STRESS

Rs 19,500 cr: The loan Aircel had taken to build its network and buy 3G and 4G spectrum

Rs 10,000 cr: Amount it spent on acquiring 3G spectrum

Rs 3,500 cr: Total spend on buying BWA spectrum
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Jan 30, 2012: Aircel is not for sale
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