Banks want to be present in proceedings as Supreme Court bars Aircel from trading in 2G

A consortium of lenders of State Bank of India moved Supreme Court, pleading to be part of proceedings of Aircel case. The group has said it will be severely affected if the Apex Court barred Aircel from trading in 2G airwaves.

The group said this order will impact repayment to creditors, adding it was vitally interested, as the Chennai-based carrier owed the bank and others a total of Rs 20,000 crore as of December 2016.

"In the event this court passes an order directing that Aircel be restrained from earning any revenue, by using 2G spectrum licences which were granted to them in November 2006, the same would severely affect all lenders as it would result in non-payment of dues owed to lenders,” the plea, filed by SBI and 11 other banks, stated.

The banks added there is no occasion for any benefit being passed on to (majority Malaysian stakeholder) Maxis or any persons as all amounts are to be deposited with SBI for benefit of lenders.

“No payments by way of dividends, profits or otherwise can be made to any of the shareholders of Aircel or Maxis unless all debt servicing obligations are met,” the plea added.

The lenders said Aircel’s shares are secured with them that cannot be transferred or sold by shareholders without their permission.

Dues owed to local banks including SBI is Rs 12,627 crore, foreign currency debt is Rs 595 crore and that from bank guarantees and letters of credit stands at Rs 3,232 crore. Maxis Communications Berhad, which owns 74% of Aircel, has since December 2005 invested Rs 33,000 crore in the unit through equity contributions, redeemable preference shares and shareholder loans.

Earlier this month, the court said it would revoke Aircel's licence if promoter T Ananda Krishnan and former executive Ralph Marshall, who ran Maxis, the parent company of Aircel at the time of the acquisition, didn't appear in an ongoing case of corruption in a lower court.

The court barred the transfer or sale of Aircel's 2G airwaves to a third party in the interim. The top court had also asked the telecom department to look for an alternative service provider for Aircel's 91 million subscribers, and it could even consider auctioning the spectrum.