The company has also tied up with State Bank of India recently for a Rs 1,500 crore loan to meet its working capital requirements, based on a letter of comfort extended by Department of Telecom (DoT).
State-owned BSNL is confident of making timely payment of staff salaries for the month of May, Chairman and Managing Director Anupam Shrivastava said Monday. The company has also tied up with State Bank of India recently for a Rs 1,500 crore loan to meet its working capital requirements, based on a letter of comfort extended by Department of Telecom (DoT). “We are comfortable…We will be able to pay salaries on time this month,” Shrivastava told PTI.
The salary tab of nearly Rs 900 crore would be supported by receivables from mobile, broadband and enterprise businesses, he said. The telecom PSU, which has 1.68 lakh employees, faced a problem in clearing staff salaries for February. The government last month extended an approval and letter of comfort for the PSU to avail loans of up to Rs 3,500 crore from banks for working capital needs – a move that is expected to spell relief for the company battling intense liquidity pressure.
Shrivastava said following the approval and letter of comfort from DoT, the company has tied up with SBI for a loan of about Rs 1,500 crore, recently. The rest of the amount would be availed depending on the company’s requirements, he said adding that talks were on with multiple banks. “With the letter of comfort, we can approach banks for loans of up to Rs 3,500 crore. While loans of up to Rs 1,500 crore have been tied up, for the balance, we will take as needed, maybe by July this year,” Shrivastava said.
The loan from SBI is short-term borrowing, he said. “This will be used for operational expenditure and working capital needs. We have sufficient land assets and net worth to support our borrowing,” he said. Earlier this month, BSNL said its management is making all efforts to ease liquidity pressure on the company, and expects normalcy to be restored by September quarter of 2019-20.
BSNL Director had shot off a letter to all Chief General Managers of telecom circles on May 16, flagging the “fiercest ever competition” being faced by the telecom sector and said “predatory tariff offerings by the competitors” have triggered sharp decline in revenue from services. BSNL and another distressed telecom PSU MTNL are saddled with massive debt and have faced problems in clearing staff salaries in the recent past.
The government is in the process of working out a rescue plan for the two in form of a revival package that entails components like Voluntary Retirement Scheme, asset monetisation, and allocation of 4G spectrum.