Malaysian telecom giant Maxis Communications will infuse up to $900 million (over Rs 5,000 crore) in fresh equity and bring more capital through a proposed sale of broadband wireless access (BWA) spectrum, as part of a refinancing plan for its Indian mobile telephony unit Aircel, said sources directly involved with the matter.

Lenders, led by the State Bank of India (SBI), are working out a new tenure and cost for Aircel’s $3.5-billion (nearly Rs 20,000-crore) debt, which does not involve any haircuts. Maxis chief and India-origin billionaire T Ananda Krishnan has made fresh equity commitments to push ahead with the loan recast.

Standard Chartered Bank and IDFC are advising Maxis on the latest capital infusion, said people cited earlier in the report. Aircel said it could not offer immediate comments to TOI’s queries, which were emailed on Friday.

Maxis owns 74% stake while the local partner, the Reddys of Apollo Hospitals, keep the rest in Aircel, which has over 60 million subscribers.

“Maxis has committed to bring between $700-900 million in equity and raise more capital through BWA sale (for which Aircel had paid ($700 million three years ago),” said sources without detailing a time frame for these funding plans. Maxis has agreed to bring equivalent equity if the plan to sell Aircel’s BWA spectrum does not succeed, they said.

This will be one of the largest equity rejigs by foreign telecom companies after last year’s Supreme Court order, following the 2G spectrum controversy, cancelled 122 mobile permits, prompting firms like Etisalat and Batelco to exit the Indian market. Others like Norway’s Telenor and Russia’s Sistema have recapitalized local units to restart their smaller operations.

The debt refinancing is crucial for Aircel, which has explored M&A deals as part of the consolidation moves in the domestic telecom industry. It has had discussions with Sistema and Tata Teleservices but talks have been put on hold for the time being.

Aircel found it tough to service the debt even as India’s telecom sector slowed down with frequent regulatory interventions. It has ramped down operations in five heavily bleeding circles. Operational losses and funding of 3G and BWA auction wins have led to high debt-to-equity ratio for most mobile operators, which require their promoters infuse fresh equity for continuing operations, said a recent report from Avendus India Equity Research.

Aircel shareholders T Ananda Krishnan and the Reddys have been facing an ongoing probe in recent telecom sector controversies. So, the move to infuse fresh equity will be a complex affair, since the local partner’s 26% minimum ownership needs to be pr served.