Lenders tell Maxis: Pump in US$1 billion into India operations or…

maxis-aircellKUALA LUMPUR: Maxis has invested close to US$7 billion (RM28 billion) in India’s wireless telephony market but has yet to make any money. Now, it is being asked to invest at least another US$1 billion by March.

According to a report in The Business Standard, banks which had lent money to Maxis’ unit in India, Aircel, are asking it to either infuse more funds into the company or go to the National Companies Law Tribunal (NCLT) for arbitration.

The lenders have called a meeting for tomorrow to take a final call on the company’s future.

The Business Standard reported that the lenders have asked Maxis, which owns 74% equity in Aircel, to invest at least another US$1 billion so that it can meet its debt obligations.

Lenders are pushing for new infusion of money as they expect the company’s financial metrics to fall further as Aircel plans to shut services in six areas in India.

The report quoted banking sources as saying that if money was not invested in Aircel by March to repay its debt, they would have no choice but to send the company to the NCLT for resolution under the Insolvency and Bankruptcy Code.

Aircel has already defaulted on repayment of interest on its debt obligations worth Rs174 billion on account of its weak liquidity position, the report said.

Aircel, according to its website, is India’s fifth largest and fastest growing GSM mobile service provider with a subscriber base of 65.1 million.

The Business Standard reported that until October last year, Aircel was planning a merger with Anil Ambani-owned Reliance Communications (Rcom) but this did not go through as they did not get approval from India’s Department of Communications.

Aircel has tried to seek a merger with telecom tower company GTL Infrastructure but minority shareholders of GTL Infra do not favour such a merger, the report added.

The report quoted an Aircel spokesperson as saying Maxis was committed to its India operations.