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SC runs bank guarantee against Airtel Airtel, DOT

Staff reporter, New Delhi
15/12/2018   0 Comments

Aircel has approached the Supreme Court, complaining that the telecom department and Bharti AirtelNSE 5.33 % had not complied with its order to return bank guarantees worth Rs 453 crore or pay the same amount in cash to the company. In an application filed this week, the bankrupt telecom operator sought direction for immediate execution of the court’s November 28 ruling. The beleaguered telco and its Dishnet Wireless unit said the delay in getting the guarantees back added to its financial struggles. Employees aren’t paid for more than five months and there is no support to keep the firm afloat, it said in the application. The case will be heard on January 4.
 
Aircel, being run by resolution professional Deloitte under the Insolvency and Bankruptcy Code, is trying to raise funds to restart operations, generate revenue and sell assets or businesses to repay at least part of the Rs 19,000 crore it owes to banks. Plus, it desperately needs cash to pay salaries and for daily operational expenses. The top court’s November 28 order had upheld a telecom tribunal verdict ordering the Department of Telecommunications (DoT) to return bank guarantees worth Rs 453 crore, submitted to get approval for the company’s spectrum deal with Bharti Airtel in 2016. 

The court had separately directed DoT to return Rs 298 crore in cash that was also paid for getting the spectrum trading deal cleared. The government has eight weeks from the date of the order, or till January 25, to pay the cash. Airtel paid the Rs 298 crore in cash and submitted bank guarantees worth Rs 453 crore to DoT on behalf of cash-stricken Aircel, adjusting the amount against its Rs 3,500 crore deal to buy Aircel’s spectrum. But since those bank guarantees have lapsed, the apex court’s November order effectively means Airtel has to pay the Rs 453 crore to Aircel.

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