Inter-ministerial group begins process for sale of BSNL's realty assets

The Centre has started the process for sale of Bharat Sanchar Nigam’s (BSNL’s) assets. 
 

It has set up of an inter-ministerial group that would shortlist and prioritise sale of real estate assets of the cash-strapped company.
 

BSNL is yet to pay salaries to its staff for November.
 

“The group comprises officials from the Department of Investment and Public Asset Management (DIPAM), department of telecom and BSNL,” an official in the know told Business Standard.
 

The company has identified 40 land parcels worth about Rs 10,000 crore to be disposed of and will help in de-leveraging its balance sheet. It will also provide funds for 4G network rollout, expected in the second half of 2020.
 

The two firms will also monetise assets worth Rs 37,500 crore in the next three years.
 

In October, the Centre approved a Rs 69,000 crore revival package for BSNL and Mahanagar Telephone Nigam (MTNL). It includes merging the two loss-making firms, monetising their assets and giving retirement package to employees so that the combined entity turns profitable in two years.
 

The rescue package approved includes infusion of Rs 20,140 crore for purchase of 4G spectrum and Rs 3,674 crore for goods and services tax (GST) to be paid on spectrum allocation. 
 

It also calls for companies to raise Rs 15,000 crore debt on the sovereign guarantee. 
 

The government has set aside Rs 17,160 crore as retirement package and Rs 12,768 crore towards retirement liability.
 

The proceeds of the sovereign bonds issue will be to restructure debt and meet other expenses. The bond will have to be serviced by the PSUs only.
 

Over 92,000 employees of state-run BSNL and MTNL have opted for the recently announced voluntary retirement scheme (VRS).
 

Nearly 100,000 BSNL employees are eligible for the VRS out of its total staff strength of about 150,000. The effective date of VRS under the present scheme is January 31, 2020.
 

The amount of ex-gratia for any eligible employee will be equal to 35 days salary for each completed year of service and 25 days salary for every year of service left until superannuation. 
 

MTNL has reported losses in nine of the past 10 years and BSNL, too, has been ringing in losses since 2010. Total debt of both the companies stood at Rs 40,000 crore, of which half the liability is on MTNL alone.