"The Board of Directors of the company acknowledged that it has been facing troubled times in a highly financially stressed (telecom) industry, owing to intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses. This has caused significant negative business and reputational impact on the company," the statement said.
Aircel Files For Bankruptcy. 5 Things To Know
1. Aircel filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016 for undertaking Corporate Insolvency Resolution Process (CIRP) for Aircel Cellular Limited, Dishnet Wireless Limited, and Aircel Limited, a company statement said.
2. Aircel, whose debt amounts to Rs 15,500 crore ($2.38 billion), then tried unsuccessfully to restructure its debt.
3. The company said in 2016, in an effort to proactively undertake the first mobile industry consolidation, the company embarked upon a merger of its wireless business with another operator. However, on account of various issues and hurdles faced, the merger did not succeed and ultimately lapsed in September 2017. "Post-detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to restructuring of its debt and funding," Aircel said in a statement.
4. Aircel said it had decided to pursue a resolution under the country's Bankruptcy Code as the "appropriate recourse."
5. The entry of Reliance Jio in 2016 with free voice and cut-price data plans forced smaller operators to exit the crowded and competitive telecoms market, while bigger players such as Idea Cellular and Vodafone Group Plc's Indian unit are merging to stave off competition.