BSNL board skips IPO issue, talks with union continue

New Delhi, Aug 27 | Updated: Aug 28 2008, 05:54am hrs
The board of state-run BSNL on Wednesday skipped discussion on an initial public offering (IPO) as the company is still trying to bring around employees to agree to a public listing. A senior official of the PSU said the board could not take up the issue on Wednesday, as the talks with the unions were inconclusive and they would continue this week also. Earlier, the BSNL employees union had warned the management not to proceed with IPO and threatened to strike work, arguing that the proposal for 10 % equity dilution in BSNL was devoid of any merit.

The union had also rejected the argument that BSNL was in need of funds for expansion and hence it was taking the IPO route. BSNL is already having more than Rs 35,000 crores stashed in banks, the union claimed.

BSNL is conservatively valued at $ 100 billion and 10 % equity dilution would have fetched the state-run company $10 billion (Rs 40,000 crore) from the market. The interesting point is that none of the amount through IPO will come to BSNL, it will directly go to government, BSNL-EU general secretary V N Namboodiri claimed.

Last week, BSNL CMD Kuldeep Goyal had said: Employees acceptance is critical to the process to start and succeed...we are in no hurry for the IPO. We have made no tangible progress toward any consensus on IPO. PTI