Govt Starts Selling BSNL, MTNL Assets To Earn Rs 37,000 Crore; Consultants Hired
The Union government has started the monetisation of landholdings of state-owned telecoms Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL).
Read on to find out more…
Real Estate Asset Sale Of BSNL and MTNL!
In October 2019, the government had approved a revival package of nearly Rs 70,000 crore for BSNL and MTNL.
For starters, meaning in the initial step of the process, the Department of Investment and Public Asset Management (DIPAM) has appointed consultancy firms CBRE, JLL, and Knight Frank to look at the feasibility of such a sale during the pandemic.
The consultants will submit their reports by the end of July 2020.
While preparing the reports the consultation firm would look at the valuation of the assets while assessing the current market appetite. Subsequently, the companies will prioritise the asset sale.
At a meeting in the Prime Minister’s Office (PMO) last week, it was discussed that the asset monetisation of BSNL and MTNL, estimated to fetch around Rs 37,500 crore. According to an official with a know-how in the matter, the telecom department has now been told to fast track the process, according to an official in the know.
A senior BSNL official highlighted, “The appointment of the consultants is the first step. They will have several queries which have to be fulfilled by us and only then can any progress be made in the sale.”
DIPAM will work in direct coordination with BSNL, MTNL and Department of Telecommunications (DoT).
What Will Happen With The Monetisation Of LandHoldings?
Monetising real estate assets is part of the overall relief package announced last year.
This would be used to pay debts, upgrade networks, and offer a voluntary retirement scheme (VRS). The VRS aims at reducing the telecom companies’ employee strength by half.
The real estate assets primarily include land as well as rental and leasing of buildings. MTNL has around 29 retail outlets in Delhi alone. Along with this, the BSNL and MTNL will be allotted 4G spectrum at an administered price, secured at the 2016 auction value.
The relief package includes a sovereign bond issue worth Rs 15,000 crore, to be serviced by these Public Sector Undertakings (PSUs).
The sale of the land-assets of BSNL and MTNL is expected to help the government offer relief packages to the already financially stressed state-owned telecom companies.
Officials said the asset sale would be an important exercise for payment of VRS compensation to the staff of both telcos. This asset sale won’t be a one-time exercise and will be spread over a couple of years.
However, there is no official statement whether this asset sale would lead to a merger of BSNL and MTNL!