Aircel bankruptcy: At NCLT door, telco fails to pay 6000 employees over a whopping unpaid debt

More than 6,000 employees of Aircel did not receive their salaries since February. The telecom operator reportedly does not have the fund to pay its employees, or water and electricity bills.The debt-laden firm approached the National Company Law Tribunal (NCLT), seeking to appoint an interim resolution professional (IRP) at the earliest to ‘ascertain economic safeguards’, reports The Hindu.
 
Janak Dwarkadas, senior counsel appearing for Aircel told the newspaper, “There is serious urgency to hear the matter as the company wants to continue essential services. We need certain economic safeguards as the company’s employees [have been] unpaid since February. One [also] needs to pay electricity and water bills to continue services.”
 
On February 28, Aircel Ltd, along with Aircel Cellular Ltd and Dishnet Wireless Ltd had filed for bankruptcy at the NCLT, citing high unsustainable debt, price wars, and legal and regulatory challenges.
 
According to the report, Justice MK Sawant adjourned the matter to March 8, for further hearing. Loss of subscribers resulting in an operating loss for the company has come in the wake of Reliance Jio entering the market in 2016 with an aggressive pricing strategy.
 
The report also stated that Aircel has outstanding debt of Rs 50,000 crore, of which Rs 15,000 crore is due to financial creditors, while Rs 35,000 crore is to be paid to operational creditors including tower companies, system integrators, IT firms and telecom equipment makers.
 
The telco also owes dues to vendors such as the security agency, housekeeping staff and distributors, said the report.