Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 17): Maxis Bhd's India sister company Aircel Ltd which is also involved in the provision of cellular services was told by its lenders to infuse at least US$1 billion into the company to meet financial obligations.

Indian business news portal Business-standard.com reported on Jan 16 that Aircel is facing Rs170 billion of non-performing assets and its lenders have warned it to either infuse more funds into the company or go to the National Companies Law Tribunal (NCLT).

"The lenders have called a meeting on Jan 19 to take a final call on the company's future," the report said.

Aircel is 74%-owned by Binariang GSM Sdn Bhd, which in turn owns 64.91% shareholding in Maxis.

The report also mentioned lenders expect the company's financial metrics to fall further, with Aircel planning to shut services in six areas in India.

"It has been a roller coaster journey for Maxis in India. It has invested close to US$7 billion in India’s wireless telephony market, but has not made any money. 

Without elaborating, an Aircel spokesperson said the promoter was committed to its India operations. Banking sources said if money was not invested in Aircel by March to repay its debt, they will have no choice but to send the company to the NCLT for resolution under the Insolvency and Bankruptcy Code," the news portal said.

"Aircel has already defaulted on repayment of interest on its debt obligations worth Rs174 billion, on account of its weak liquidity position which worsened after the launch of Jio’s free services in September 2016. After withdrawing services from six circles, it is focusing only on the profit-making circles," the news portal added.

At market break, Maxis was trading one sen or 0.17% higher at RM6.01, giving it a market capitalisation of RM47.02 billion.

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