Private sector lender Axis Bank has told the Department of Telecom that Rs 215-crore loan to Loop Mobile will be at risk if the deal of the Mumbai-based operator to sell its assets to Bharti Airtel is not approved expeditiously. Also Read - Vodafone CEO Nick Read to visit India this week; will seek bailout: Report
“We (a consortium of lenders) had advanced loans of Rs 350 crore to Loop Mobile (India) Limited and the current outstanding is Rs 215 crore…Public money through banks has been channelised into the company which is at stake,” Axis Bank’s Senior Vice President Ashish Kumar Singh said in a letter dated September 4 to the Department of Telecom (DoT). The consortium has two other banks as members. Mumbai-based Loop Mobile’s licences will expire in November after which it will not be able to offer telecom services. The company had to buy spectrum afresh to continue its operations but it did not participate in the auction held in February. Also Read - Flipkart, Axis Bank partner to launch co-branded credit card
The company in June last had entered in to agreement with Bharti Airtel to sell its assets for about Rs 700 crore. DoT estimates that Loop Mobile and its other sister concern owes it about Rs 808 crore. The Department, according to sources, has held the clearance related to the deal as the payment has not been made yet to the government. No comment on this could be obtained from Loop Mobile. Also Read - BSNL agrees to lay off 54,000 employees, but waiting for elections to be over: Report
Loop Mobile in a representation had earlier said that money realised from its deal with Airtel will be used for clearing debts and hence it should be expedited. “Considering the said deal will safeguard interests if Banks and subscribers, we request you to expedite the approval for the said deal,” Singh said in the letter to the DoT.