Telecom operator Aircel today said it has filed for bankruptcy as the company has been facing "troubled times" in "highly financially stressed" industry.
In a statement here, Aircel said that intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant "negative business and reputational impact" on the company.
"The Board of Directors of the Corporate Debtor today announced that they have filed an application under Section 10 of the Insolvency and Bankruptcy Code 2016 for undertaking Corporate Insolvency Resolution Process for the respective companies: Aircel Cellular, Dishnet Wireless, Aircel Ltd," the the statement said.
Sources said that the filing was made in National Company Law Tribunal (NCLT) Mumbai.
The company statement also noted that efforts to merge wireless business with another operator did not yield any results and had ultimately lapsed in September 2017.
"Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to restructuring of its debt and funding. Despite these discussions and the invoking of a Strategic Debt Restructuring scheme in January 2018...no agreement could be reached," Aircel said.
The company also said it believes that in the current circumstances, resolution process under the Insolvency and Bankruptcy Code is an "appropriate recourse".
"The Company would like to emphasise that CIRP is not a proceeding for liquidation, rather is a process to find best possible resolution for the current situation and that would be in the best interest of everyone (vendors, distributors, employees, etc) to protect and preserve the value of the company and manage the operations," it added.
Aircel said it will strive to provide uninterrupted service connectivity to its customers and sought their support in the "current difficult period".
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