19 Jun Don’t expect any further hurdles to sale of Aircel assets, including spectrum: UVARCL CFO
Asset reconstruction firm UVARCL is now the custodian of bankrupt telco Aircel’s assets.
UVARCL’s CFO Ritesh Aggarwal tells ET that lesser regulatory delays would have meant better prospects for its assets, but going ahead expect no further hurdles.
Edited excerpts:What are your plans with Aircel’s assets?
Reviving the business of the company to your previous level seems almost impossible. There were 75 million subscribers in Aircel, who have given up your connection and to restart the telecom services, a huge amount of capital is required. The environment is also not conducive, because the existing players are also struggling. We will retain and operate the assets which are commercially viable and sell those which have higher sale value, rather than higher use value.
Which assets will you sell?
Assets which we would look to monetize is the ‘right to use’ of the spectrum, the 14,500 km of optical fiber network, real estate and equipment.
What approvals do you need from the Department of Telecommunications (DoT)?
We need the DoT’s approval for trading of spectrum when we get a buyer. Otherwise, no approval is required. The order says that we should seek approvals and the DoT should consider it favourably.
Have you started any discussions with any of the operators?
When we were drafting the resolution plan, we were in touch with a couple of prospective buyers, but those were initial discussions and you know, we got an encouraging response. So, based on that response, we had the original resolution plan and we expect the ‘right to use’ spectrum to be sold. We will have to reinitiate all those discussions once we table once we are in that position, once we formally become a shareholder.
When do you start the resolution process?
It should take a month or so to start running the process. So now we have to get regulatory approval from RBI.
With the delays in resolution approval, the value of assets like spectrum would have eroded. Your comments.
Spectrum is a commodity which comes with limited validity. So there certainly has been a depreciation but the demand for this particular commodity is still high. Of course, the time value has eroded but this would not have a significant effect on the pricing as such.
Due to the delay, whoever gets the spectrum will get a lesser period to utilise that spectrum.
What about the delays that have impacted other assets?
If we had gotten the approval six-seven months earlier, we would have fetched a better value for the spectrum. In terms of other assets, such as real estate, it was better before Covid started, it may not be very encouraging for the real estate sector. So, of course, the earliest possible resolution gives you the best value but then situations keep on changing and impacting the value.
Why will operators buy spectrum when auctions are on in a few months?
As far as fresh auctions are concerned, Aircel’s spectrum could be more attractive due to the price element. The spectrum bands are of good quality. Demand should not be a problem for us to find a buyer for this spectrum.
How many board seats is the CoC getting?
CoC will get one board seat and they will also get affirmative right. So, without the nominee director of the CoC, no resolution can be passed.
What about Aircel’s employees?
We have 180 employees. We expect to retain all these employees. As we take charge of operations, one needs to take a business call depending on how someone is performing or not.
Are you going to get other players in Aircel now?
When you look at the reality, whether it’s feasible for anybody to enter into this business, to rebuild the business with the kind of investment and kind of regulatory framework that you have. So, would anybody really be interested? That is something to be seen.