1 min read.Updated: 16 Mar 2021, 12:21 PM ISTIshita Guha
The asset monetization is part of the revival plan of BSNL and MTNL, which includes a voluntary retirement scheme to slash employee cost and the merger of the telcos, which has now been shelved due to the companies’ financial constraints
New Delhi: The government has identified several assets of state-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) for sale in the next financial year starting April, said Tuhin Kanta Pandey, secretary, department of investment and public asset management (Dipam).
The asset monetization is part of the revival plan of BSNL and MTNL, which the Union cabinet approved in October 2019. The package included a voluntary retirement scheme (VRS) to slash employee cost and the merger of MTNL with BSNL, which has now been shelved due to the companies’ financial constraints.
“There is a package that has been approved, which includes a number of things. There was VRS, money allocated to buy 4G spectrum and so on so forth. One of the consideration was they will raise money through monetization of BSNL and MTNL properties. There are several properties which have been identified and going forward, they will go for bidding," Pandey told television news channel CNBC-TV18.
Pandey, however, said the bidding process of these assets will not be completed in the next fiscal as the size of the identified properties is too large. The proceeds from the sale of the assets will help the government raise money to turn around the two money-losing firms.
“I don’t think we will be able to complete the bidding in FY22 because there are large number of properties, but there will be substantial number of assets, which will be brought to bidding," he added.
The merger and revival plan, which was estimated at ₹69,000 crore, included capital infusion of ₹20,140 crore by the Centre to meet the cost of spectrum for BSNL’s 4G roll-out. The government also agreed to bear the goods and services tax (GST) amount of ₹3,674 crore on the overall spectrum cost. The turnaround plan included issuing sovereign bonds worth ₹15,000 crore to be serviced by the two companies. Besides, assets worth ₹38,000 crore will be monetized in four years.
In January, the department of telecommunications said BSNL and MTNL’s operating performance or earnings before interest, tax, depreciation and amortization (Ebitda) turned positive in the first six months of the current financial year.