VSNL writes off investment in TVCL, gets new JV partner
By Mumbai: | 05 Sep 2003
Mumbai: Videsh Sanchar Nigam Ltd (VSNL) has written off its investment of around Rs 9.2 crore in TVC India Pvt Ltd (TVCL), a joint venture (JV) company formed by VSNL, Infrastructure Leasing & Financial Services Ltd (IL&FS) and Telstra.
The write-off is due to the reorganisation of TVCL, after one of the partners, Telstra, exited from the JV, apart from the "difficult financial" position of the company, VSNL said in its annual report for the year 2002-03.
The report, however, added that TVCL is being restructured with the introduction of a new partner, Essel Shyam.
TVCL had a total paid-up capital of around Rs 31.4 crore, with VSNL, IL&FS and Telstra holding the equity ratio of 40:40:20. The company undertakes turnkey VSAT projects and provides consultancy and facility management services for large and corporate organisations.
The annual report also mentioned that with the termination of VSNL's monopoly in international long-distance (ILD) arena, two years ahead of the schedule, the company is slated to face increased competition from other players. This might also erode its revenue, forcing VSNL to opt for new businesses.
VSNL has undertaken several initiatives to compete effectively and meet the increasingly diverse needs of its corporate and retail customers, it said, adding these are in the areas of profit enhancement and customer service, among others.
The Internet service provider is also planning to de-merge its surplus land in Pune, Kolkata, New Delhi and Chennai into a separate company, the shares of which will be distributed pro rata to VSNL customers. But the company did not specify any time period for the de-merger.