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Govt begins asset sale process for BSNL and MTNL, hires consultancy firms

The Union government has started the process of monetising landholdings of state-owned telcos Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL). In a definite first step, the Department of Investment and Public Asset Management (DIPAM) has appointed consultancy firms CBRE, JLL, and Knight Frank to look at the feasibility of such a sale during the pandemic.

The consultants will submit their reports by end of the month.

The asset monetisation of BSNL and MTNL, estimated to fetch around Rs 37,500 crore, was discussed at a meeting in the Prime Minister’s Office (PMO) last week. The telecom department has now been told to fast track the process, according to an official in the know.

The consultants would look at the valuation of the assets, along with the current market appetite, while preparing their reports. The companies will prioritise the asset sale thereafter. CBRE, JLL, and Knight Frank did not respond to queries sent by this newspaper.

The sale of the land bank of BSNL and MTNL is expected to help the government offer relief packages to the financially stressed state telcos.

In October 2019, days before Diwali, the government approved a revival package of nearly Rs 70,000 crore for BSNL and MTNL.

Monetising real estate assets is part of the overall relief package that would be used to retire debts, upgrade networks, and offer a voluntary retirement scheme (VRS) aimed at reducing the telcos’ employee strength by half.

The real estate assets primarily include land as well as rental and leasing of buildings. MTNL has around 29 retail outlets in Delhi alone. The relief package includes a sovereign bond issue worth Rs 15,000 crore, to be serviced by these PSUs. Also, BSNL and MTNL will be allotted 4G spectrum at an administered price, pegged at the 2016 auction value.

Officials said the asset sale would be an important exercise for payment of VRS compensation to the staff of BSNL and MTNL. Asset sale is not a one-time exercise and will be spread over a couple of years.

“The appointment of the consultants is the first step. They will have several queries which have to be fulfilled by us and only then can any progress be made in the sale,” a senior BSNL official pointed out.

DIPAM will work in close coordination with the two companies and their parent ministry DoT. There’s no official word yet on whether the asset sale would take the two telcos closer to a merger.

-Business Standard

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