Lenders looking to enforce guarantees of former promoters of Aircel

Maxis gave Rs 12,000 cr guarantees to SBI

Lenders of Aircel Ltd are looking at the option to invoke the corporate guarantees given by the former promoters of the wireless telephony company. The company had defaulted to Rs 20,000 crore of debt and was sent to the National Company Law Tribunal (NCLT) in 2018.

State Bank of India has Rs 12,000 crore of corporate guarantees given by Aircel’s Malaysian promoter, Maxis.  “The onus is on SBI to invoke the guarantees but the bank has a difficult task in hand ahead as Maxis has no operations in the country,” said a banking source. Maxis, a multi-billion dollar conglomerate in Malaysia, owned 74 per cent in Aircel while the rest of the stake was owned by the promoters of Apollo Hospitals, the Reddy family.

After its shut operations in 2017, the company was sent for debt resolution by lenders and UV ARC emerged as the highest bidder for the company with an offer of just Rs 150 crore to the lenders. The matter is currently pending in the Supreme Court after the UV ARC and the lenders moved the highest court appealing against the National Company Law Appellate Tribunal (NCLAT) April order which said Aircel must also clear its spectrum dues worth Rs 12,389 crore to the Department of Telecom (DoT) before UV ARC takeover. In several IBC cases, the lenders have retained the guarantees with them so as to recover dues from former promoters by selling their personal assets. In most of the cases, banks seldom receive any funds as promoters don’t keep any assets under their name.

SBI officials were unavailable for comment.

After the debt resolution, lenders now plan to take action against former promoters who had given their guarantees.  “In many IBC cases, the former promoters have walked free after their companies have been sold to the highest bidder.  With a Supreme Court decision in their favour, lenders are now planning to invoke the guarantees given by the promoters,” said a corporate lawyer.

“Though it is still unclear on the invoking personal guarantees of bankrupt companies before December 2019 (when the government came out with notification to invoke personal guarantees and was challenged in the SC),” he said.

(With inputs from Abhijit Lele)