MTNL shareholders’ meet 8 Jan on plans to raise ₹6,500 cr, asset monetisation1 min read . Updated: 11 Dec 2019, 05:51 PM IST
- The government in October had announced a revival package that included the merger of MTNL with BSNL
- BSNL employs 1.76 lakh people across the county, while MTNL has around 22,000 employees
Mahanagar Telephone Nigam Ltd (MTNL) on Wednesday said the company will hold an extraordinary general meeting (EGM) on 8 January to seek approval from its shareholders on plans to raise funds worth ₹6,500 crore and to get clearance for monetisation of assets owned by the firm.
The state-owned telecom operator plans to issue non-convertible debentures amounting to ₹6,500 crore on a private placement basis to raise funds, MTNL said in a regulatory filing today.
“…Board of directors of the company may, from time to time, determine and consider proper and most beneficial to the company including the timing/date of issue of debentures, the consideration for the issue, utilisation of the issue proceeds and all matters connected with or incidental thereto," it said.
MTNL also plans to monetise assets—land, buildings, towers and fiber assets--identified by the board of company following the department of investment and public asset management’s (DIPAM) guidelines that are intended towards the revival of the debt-ridden telecom company.
“…The consent of the shareholders to monetise towers and fiber assets as specified/identified by the board by following an appropriate model including leasing after considering the market conditions with the aim to maximise the returns as per the revival plan of the company, as approved by the union Cabinet," the company said.
The government in October had announced a revival package that included the merger of MTNL with Bharat Sanchar Nigam Ltd (BSNL). Until the proposed merger, MTNL will operate as a subsidiary of BSNL.
The revival package also included raising sovereign bonds worth ₹15,000 crore, monetising assets amounting to ₹38,000 crore, and a voluntary retirement scheme (VRS) for employees.
BSNL employs 1.76 lakh people across the county, while MTNL has around 22,000 employees. The employee cost of BSNL and MTNL is 75% and 87% of their total income respectively.
The turnaround plan also included the allotment of spectrum for fourth-generation or 4G services at 2016 prices to the two companies with costs to be borne by the government.
On 8 January, MTNL seeks to receive shareholders’ approval to issue non-convertible redeemable non-cumulative preference shares (NCRNCPS) on a private placement basis to the government for payment of spectrum cost for 4G services, the company said in the filing.
Shares of MTNL ended 4.05% lower at ₹7.58 on the BSE today.