BSNL raises Rs 8,500 cr via sovereign bonds; to sell assets worth Rs 18k cr

State-run telecom firm BSNL raised more than Rs 8,500 crore through sovereign guarantee bonds with government funds and PSU banks participating in the issue, a top official of the company said on Monday.

BSNL Chairman and Managing Director P K Purwar said the company is also planning to monetise assets worth Rs 18,000 crore within a year and expects the loss-making company to become operationally profitable in the financial year 2021.

"We opened the bond issue at 10.30 am and closed at 12 pm. The bond was subscribed over two times. We were able to get bids of over Rs 17,170 crore but we accepted only Rs 8,500 crore as per the approved bond size," Purwar told reporters.

BSNL received a total 229 bids valued at Rs 17,183 crore. The bonds have been issued at a coupon rate of 6.79 per cent per annum for a 10-year period.

BSE stock exchange in a statement said that BSNL made its first-ever bond issue successfully and raised Rs 8,500 crore by issuing bonds on private placement basis using BSE BOND platform.

BSNL saw participation of ICICI Prudential Bond, National Pension Scheme, Postal Life Insurance Rural Postal Life Insurance, State Bank of India, Punjab National Bank etc.

"SBI has participated in a big way. State Bank of India has directly contributed Rs 1,500 crore," Purwar said.

The provision of sovereign bonds was part of a revival package of debt-ridden public sector telecom firm.

Purwar said that the company has applied for 5G trials but the company will review the partner for the trials based on government guidelines.

BSNL applied for 5G trials with Chinese telecom gear maker ZTE. The Chinese firm has supplied around 44 per cent of mobile network equipment to the company.

Meanwhile, the company expects the government will soon approve a proposal for floating 4G tender which will focus on including "Made in India" telecom gears in the network.

Purwar said that the fund raised through bonds will be used to partially pay off dues of its vendors.

"The dues of the vendors have significantly reduced in 3-4 months. Part of the money raised through bonds will also be used to clear dues of vendors," Purwar said.

The government had also approved a sovereign bond issue worth Rs 6,500 crore for MTNL which will be raised separately.

Talking about asset monetisation plan, Purwar said that it has identified 14 assets which will be monetised and out of which 11 assets have been given in-principle approval by an inter-ministerial group.

"The value of those assets is around Rs 18,000 crore. Those assets are proposed to be monetised in the current 12 months period. This is a very big challenge and task. This is the period where economic activities have been impacted due to COVID-19 and business sentiments are a little bit impacted because of COVID. Despite all challenges, we all know BSNL has a very good quality of assets," Purwar said.

He said that the company is also working on resolving all voluntary retirement scheme related issues within 30 days.

The VRS was offered by BSNL to its employees on October 4, 2019. The scheme was closed on December 3, 2019. As many as 78,569 employees have opted for the VRS.