Aircel Lenders Approach Supreme Court Against NCLAT Order: Here's Why

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Aircel has filed a petition in the Supreme Court against the NCLAT order, which does not allow the telco to sell its spectrum. The National Company Law Appellate Tribunal (NCLAT) asked Aircel to clear all Government dues before selling its spectrum.

 

Aircel Lenders Approach Supreme Court Against NCLAT Order: Here's Why

"We have approached the Supreme Court in anticipation that they would set aside this (NCLAT) order as liquidation threat looms large over this firm (Aircel)," a senior official in SBI was quoted by ET.

Notably, the State Bank of India is heading the committee of creditors of Aircel. The report said that other parties like UVARCL and Deloitte might approach the
Supreme Court against the NCLAT order. However, both UVARCL and Deloitte have declined to comment on the same issue.

NCLAT Order Might Impact Other Telecom operators

However, it seems that the NCLAT order might impact another bankrupt firm Reliance Communication, which is also going through a spectrum issue. For the unaware, the NCLAT in its order said that telcos need to clear all dues before utilizing their spectrum they hold.

"The spectrum cannot be utilized without payment of requisite dues, which cannot be wiped off by triggering CIRP (corporate insolvency resolution procedure) under the I&B Code (Insolvency and Bankruptcy Code)...Defaulting licensees/ telcos cannot be permitted to wriggle out of their liabilities," NCLAT said.

Aircel has to pay Rs. 12,389 crores, whereas Reliance Communication needs to clear Rs. 26,000 crores and Videocon Telecommunication has to clear Rs. 1,376 crores adjusted gross revenue dues. In addition, DoT claims that Aircel needs to pay additional dues of Rs. 14,000 crores, including non-payment of instalments for the spectrum.

Aircel Filed Bankruptcy

Aircel Cellular filed for bankruptcy in 2018. The company has filed for bankruptcy due to growing competition and debt. Besides, the company has filed for bankruptcy after Reliance Jio launched services in 2016.

 

Reliance Jio's free voice calls and affordable data prices disrupted the telecom industry. The free calls impacted all telecom operators as 90 percent of revenues used to come from voice calls. In fact, Aircel is not the only telecom operator who left the telecom industry as RCom did the same and now, only three telcos are operating in the country.

However, Reliance Jio and Airtel are leading the segment, while Vodafone-Idea is struggling to clear its dues, which is why there are high chances that both leading telcos might stay in the industry.

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