Indian mobile operator Aircel Ltd. is set to file for bankruptcy at the country's National Company Law Tribunal, The Economic Times reported, citing sources.
Aircel, which reportedly dissolved its current board ahead of the application, is working to nominate new board members and an insolvency professional to begin the bankruptcy process.
The bankruptcy application follows Aircel's Malaysian parent Maxis Bhd. reportedly backing out of plans to invest up to $1.1 billion in the debt-laden company, supposedly to help restructure debt worth 155 billion Indian rupees. The latter, which has not made payments since September 2017, has also failed to clinch a deal with its lenders.
The demise of Aircel affects around 5,000 employees. It is likely to stop paying salaries by the end of the week of Feb. 19.
Companies working to recover dues and expected to be hit by the bankruptcy include tower lessors ATC Telecom Infra Pvt. Ltd., Bharti Infratel Ltd., GTL Infrastructure Ltd. and Indus Towers Ltd. and network management vendors Ericsson AB, Nokia Corp. and ZTE Corp.
Aircel had explored a merger with Reliance Communications Ltd., but the companies terminated the deal "by mutual consent" due to "inordinate delays caused by legal and regulatory uncertainties," among other reasons.
When approached by S&P Global Market Intelligence, Aircel was unavailable to comment.
As of Feb. 16, US$1 was equivalent to 64.34 Indian rupees.