The asset sale of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) has begun, reported the Business Standard. The Union government has started liquidating the land of the telcos, and consultancy firms CBRE, JLL, and Knight Frank have reportedly been appointed to see how feasible a sale is during the pandemic. These firms will be have to submit their report by the end of the month.
This is part of the revival package that was announced, which also seeks to merge the two entities. In October last year, when the government had announced its decision, it had said that assets worth Rs 38,000 crore would be monetised over four years.
The Business Standard reported that the telecom department has been told to fasttrack the process.
Sanjay Dhotre, the Minister of State for Communications informed the Lok Sabha last year that BSNL and MTNL have identified 14 and 16 properties respectively “for monetisation through Department of Investment and Public Asset Management (DIPAM). 11 properties of BSNL and 6 properties of MTNL have been approved for monetisation by DIPAM’s Alternate Mechanism (AM).”
As part of the revival package announcement, Telecom Minister Ravi Shankar Prasad in October last year had said: "BSNL and MTNL are strategic assets. BSNL and MTNL will raise a sovereign bond of Rs 15,000 crore for their revival and assets of both the PSUs worth Rs 38,000 crore will be monetised. The Cabinet also approved an attractive VRS package for the employees. The government will provide 4G spectrum on an administrative allocation basis. The Cabinet has also given in-principle nod to the merger of BSNL and MTNL and till modalities are in place, MTNL will be a subsidiary of BSNL."
The telcos will monetise stheir assets so as to raise resources for retiring debt, servicing of bonds, network upgradation, expansion and meeting the operational fund requirements.
A source told Business Standard that this asset monetisation is important to pay off the VRS compensation to staff of the telcos.