Airtel and Jio join the bid for Aircel’s assets

21 September 2018 | Natalie Bannerman

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Bharti Airtel and Reliance Jio have bid to buy the tower and fibre assets of struggling Indian operator Aircel.

According to a source speaking exclusively to Livemint, Aircel lenders, which include State Bank of India, Punjab National Bank and Bank of Baroda, are keen to sell to a single company for a lump sum as it would be better value for the assets.

“The bids have been received. But we are thinking of the possibility of a lump sum sale, that is, give all of the assets to a single party. This should get better value for the assets,” We are hoping to get over ₹25,000 crore ($3.5 billion) from asset sale proceeds.”

Aircel, which was owned by Malaysia’s Maxis, went into bankruptcy in March of this year. Deloitte, which is in control of the bankruptcy process, refused to comment to the Economic Times. Aircel owes employees and suppliers, including Ericsson. The company owes 500 billion rupees ($750 million). Hit by the increasingly intense competition in the Indian telecoms market, things only got worse for the operator with the entrance of Reliance Jio back in September 2016 with its free calls and cheap data packages.

Things only got worse when in October 2017 Reliance Communications called off its plans to merge its wireless business with the troubled Aircel, citing legal and regulatory worries in addition to “intervention of vested interests of derail the deal”.

Bids for the company’s assets closed earlier this week with two investment firms and Sterlite Technologies, a telecoms equipment manufacturer among the bidders according to Livemint – although Sterlite has since denied its involvement in the bidding process in a regulatory filing.

The assets up for sale include spectrum licences, towers and fibre which is presently valued at ₹32,362 crore ($4.4 billion), according to Aircel’s lawyer. The company currently has 65MHz spectrum in the 2,100MHz band, 103MHz spectrum in the 1,800MHz band, and 21MHz spectrum in the 900MHz band. 

According to reports, Airtel is the sole bidder for Aircel’s spectrum assets whie Jio is the sole bidder for its telecoms towers. Airtel is reportedly still in the mix for Aircel’s fibre along with Sterlite Technologies, private equity firm I Squared Capital, and distressed asset fund Aion Capital.