At Aircel, the last calls are hurting the most

MUMBAI: Aircel and its unit have sacked some 1,000 of its 1,229 remaining employees, unable to meet related costs as the resolution professional (RP) Deloitte strives to keep the bankrupt mobile phone company running so that its assets fetch a good price in the ongoing insolvency process."There has not been a regular source of any cash flow from operations, and the funds garnered from recoveries/litigations could only help sustain for a limited timeframe. The companies have now reached a precarious financial position and need to right size the current workforce strength in line with its current situation," the resolution professional said in a letter to all employees earlier this month. The last working day for the sacked employees was August 16. In the letter, the RP assured the exiting staff that salaries for July will be paid and that consulting firm Aon Consulting was working on the exit pay for each of them.Aircel is in the midst of an insolvency process with the RP trying to sell assets to repay banks, who are owed some Rs 20,000 crore.The RP has been running the operations of the bankrupt telco, owned by Malaysia’s Maxis, with around Rs 90 crore that some employee-run groups had helped recover, besides Rs 341.8 crore and Rs 298 crore that Aircel got from Bharti Airtel and the telecom department respectively, related to the deal to sell 4G spectrum to the Sunil Mittal-led operator.70885015 But the funds appear to be running out rapidly. Aon has chaffed the employees on whether they are required for the long term to keep company as a going concern; or if they are required for an interim period in roles like compliances, legal and tax matters, sale of assets; and finally, those whose services are not needed any more. "Aon’s report on manpower planning states that out of 1,229 employees as on 26th April 2019, 246 employees were deployed in 78 unique roles which were identified to maintain the companies as going concern,” the RP said in the letter. Aon then interviewed these employees for the identified critical roles and positions in their corresponding business segments/departments/geographies.“Aon has identified that 170 to 200 employees are required in current situation and that the rest of the employees will have to be let go immediately," said the mail. Aircel, filed for bankruptcy in March 2018, after failing to service debt of Rs 20,000 crore. Deloitte and the lenders have zeroed in on UV Asset Reconstruction Co Ltd to hand over the reins of the company. However, legal battles including a major one over ownership of spectrum with the telecom department have been severe roadblocks.On Wednesday, the RP’s legal representative argued in the National Company Law Tribunal (NCLT) that the telco had the ‘right of use’ over spectrum, which meant that the airwaves come under the definition of property and can be sold as part of asset monetisation. The airwaves were bought in auctions for Rs 6,249 crore and were currently valued at Rs 6,239 crore. However, a lawyer representing the telecom department said spectrum was a natural resource belonging to the government and public, and one cannot possess it or claim any rights without making necessary due payments.The tribunal will next hear the case on September 19.

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