Govt extends Rs30,000-cr line of credit to BSNL ahead of 4G rollout
06 Jan 2020
The government has extended a Rs30,000 crore line of comfort for Bharat Sanchar Nigam Ltd (BSNL). This is over and above the Rs70,000-crore revival package announced for BSNL and MTNL.
The revival package was to fund a Rs29,937 crore voluntary retirement scheme (VRS) for employees above 50 years of age, which is the biggest chunk of the revival package, pay up working capital credit and acquire 4G spectrum, which it has been lacking so far.
The VRS package comprises Rs17,169 crore ex-gratia amount and Rs12,768 crore towards pension, gratuity and commutation. Of the 1 lakh eligible employees for VRS, 78,560 have opted for the scheme. By the end of 31 January all these employees will be provided a retirement package.
The government believes that by reducing the huge workforce of the firm, 1.65 lakh employees of BSNL for instance, which eats up 77 per cent of its revenues in payment of salaries, the companies can become competitive and profitable over a period of time.
Apart from VRS, the government will be providing Rs 23,814 crore towards administrative allocation of 4G spectrum to these firms. The two firms will also raise long-term bonds of Rs15,000 crore for which sovereign guarantee will be provided by the government. With this amount the two firms will restructure their existing debt and also partly meet their capex, opex, and other requirements. The government also said the two PSUs would monetise their assets like land etc worth Rs38,000 crore over a period of four years.
BSNL needs to pay its vendors dues that add up to more than Rs10,000 crore. It owes more than Rs2,000 crore to network provider Nokia alone.
BSNL has sought a loan of Rs4,000 crore to Rs5,000 crore from State Bank of India (SBI) to meet its immediate capex requirements.
BSNL has so far secured loans of around Rs20,000 crore and plans to raise another Rs10,000 crore in the near future.
Meanwhile, the state-owned telecom firm has submitted details of 14 properties worth Rs20,160 crore to the Department of Investment and Public Asset Management (DIPAM) as part of an asset monetisation plan.
Reports citing BSNL Chairman and Managing Director P K Purwar said the 14 assets identified for monetisation are spread across India in locations like Mumbai, Thiruvananthapuram, Chennai, Ghaziabad and other places.
The revival package also includes merging both BSNL and MTNL - the two loss-making firms - monetising their assets and giving VRS to employees so that the combined entity turns profitable in two years.