Mid-tier Indian operator Aircel has reportedly received Rs60bn (US$976.78m) in equity infusion from its majority shareholder, Malaysian telco Maxis, in order to pay Rs25bn (US$406.2m) in debt’s annual interests.
Lenders asked Aircel to bring in more…
Mid-tier Indian operator Aircel has reportedly received Rs60bn (US$976.78m) in equity infusion from its majority shareholder, Malaysian telco Maxis, in order to pay Rs25bn (US$406.2m) in debt’s annual interests.
Lenders asked Aircel to bring in more money before agreeing to a four-year moratorium on payment of the loan’s principal amount.
The funding will allow Aircel, which has Rs200bn (US$3.25bn) worth of liabilities, to avoid a debt restructuring, according to the Business Standard citing sources close to the company.
The telco incurred a large part of this debt, Rs135bn (US$2.2bn), to buy 3G and BWA spectrum in 2010.
Aircel and Maxis were not immediately available for comment.
At this stage, Maxis is not planning to increase its stake in Aircel beyond 74%, despite recent changes in foreign ownership rules allowing it do so, according to the Business Standard.
Speculations about a cash infusion first emerged in late May, as the operator has been struggling to gain scale in India’s saturated market. At the time, it was reported that Aircel was also considering selling some of its BWA spectrum.
It was also recently suggested that Aircel has been in talks with rivals Tata Docomo and MTS about a combination of their operations – a move that would create the country’s third-largest wireless player by subscribers.
Rumours about merger talks have circulated for a while. Earlier this year, local newspapers wrote that Tata Docomo’s owners – India’s Tata Group and Japan’s NTT Docomo – were reluctant to take on Aircel’s debt.
However, Aircel has reportedly managed to increase its revenues while cutting down its losses in the first half of this year, as compared to last year, which may bolster its potential partners’ confidence.
