THE COMPANY VANISHED IN THIN AIR

Presented by:
SATYAJIT ROUT
320SM1018
 CONTENTS
• INTRODUCTION
• REASONS OF FAILURE
• REFERENCE
 INTRODUCTION
• Aircel Ltd. was an Indian mobile network operator
headquartered in Mumbai that offered voice and 2G and
3G data services. It was founded by Chinnakannan
Sivasankaran and started its operations in the Tamil Nadu
telecom circle in 1999.
• Maxis Communications held a 74% stake and Sindya
Securities and Investments held the remaining 26% stake
of Aircel.
 REASONS

WHY AIRCEL FAILED?

1. Rapid Decrease in Market Share & Income
after Launch of Jio:
 2. Unsustainable Debt
• Aircel has suffered significant negative business and reputational impact
due to unsustainable debt and increased losses.
• The company had debt of over Rs 15,000 crore as of December-17.
• Aircel was unable to reach consensus with respect to the restructuring of
its debt and funding.
 3. Funding from Holding Company has
stopped
• Considering the financial position of the company and failure of SDR
Program, Maxis which was holding 74% equity in the company has
stopped funding the company since it felt that the company may not be
able to sustain the competition with existing market conditions.
 4.Failed to merge with Rcom
• Since Aircel was not able to obtain funding to continue business, it has
planned for merger with RCom (Anil Ambani’s Company) with 50% stake
in merged entity which will be named as ‘Aircom’ which will have 15%
market share.
• If that happened, Aircel could have reduced its outstanding debt by Rs
14,000 Crores. But the same was rejected by RCom due to bad reputation
of Aircel due to Aircel-Maxis scam.
 5. Aircel-Maxis scam & Politics
• In 2006, Maxis had taken over Aircel by acquiring a 74% stake.
•  In 2011 Aircel owner C Sivasankaran lodged a complaint with the Central
Bureau of Investigation (CBI) alleging he had been pressured to sell his stake to
Maxis.
• Sivasankaran also alleged that former Union minister Dayanidhi .
• BJP draged former finance minister P Chidambaram into this.
• In July 2018, CBI named P Chidambaram and his son as accused in its
supplementary charge sheet. The charge sheet named 16 other co-accused.
 REFERENCES
• https://en.wikipedia.org/wiki/Aircel
• https://taxguru.in/finance/aircel-filed-bankruptcy-despite-7-5-crores-subsc
ribers.html
• https://www.financialexpress.com/industry/aircel-files-for-bankruptcy-3-k
ey-reasons-behind-telecoms-extreme-step/1084202/
• https://www.businesstoday.in/industry/telecom/story/aircel-bankruptcy-tel
ecom-sector-nclt-numbers-insolvency-248448-2018-03-01
• https://www.business-standard.com/about/what-is-aircel-maxis-case
• https://www.youtube.com/watch?v=cIBAjaqC7hE