Aircel?s parent company is reportedly planning to simplify the Indian arm’s holding structure, according to news reports. This is expected to be in preparation of a stake sale and to prevent Aircel’s substantial debt from affecting its other businesses.
Binariang GSM, the holding company of the group promoted by T. Ananda Krishnan, who owns Maxis, has reportedly informed RAM, a Malaysian rating agency, that it is attempting to ?decouple? Aircel from the group.
In its report, RAM stated, “This is expected to be concluded in the next nine months. Should the restructuring exercise not be completed within the suggested timeframe, the ratings of the Sukuk (bonds) will have to be reassessed.?
While details of the procedure have not been revealed, it is believed that the group may bring Aircel?s shareholding structure under one company, instead of various group entities.
RAM?s report added, “Aircel has made hefty investments to support network rollout as well as third generation and broadband wireless access spectrum acquisition costs in India. As these investments have resulted in substantially increased debt levels at Aircel and are not expected to generate strong earnings in the near term, this has in turn weighed heavily on the Binariang Group’s consolidated balance sheet and debt protection indicators.?
