In a bid to curb losses, telecom firm MTNL has received the approval for raising funds up to Rs 6,500 crore by selling its assets (land and buildings) and through the issuance of non-convertible debentures.
In a bid to curb losses, telecom firm MTNL has received the approval for raising funds up to Rs 6,500 crore by selling its assets (land and buildings) and through the issuance of non-convertible debentures. The company has assets in prime locations where residential and commercial complexes can be established. With the sale of land parcels in Mumbai, MTNL can monetise Rs 5,000 crore and Rs 1,000 crore worth assets have been initiated for monetisation in Delhi.
“MTNL shops-cum-office complexes in seven DDA markets in Delhi along with 96 quarters in Noida and 398 quarters purchased by MTNL in various housing complexes in Mumbai are also going to be for monetisation in the first phase,” the company had said in a recent statement. It is to note that MTNL had posted a loss of Rs 3,388.07 crore and a revenue of Rs 2,085.41 crore in FY19 whereas the total debt on the company is around Rs 20,000 crore. With the monetisation of assets, the company can push Rs 6,500 crore its losses/debts.
MTNL, last week has started the process to monetise assets worth Rs 23,000 crore. The company which is expecting to earn around Rs 500–600 crore per annum through rents, is also aiming for around Rs 7,000 crore in the financial year 2020–21 through real estate asset monetisation, which again is a part of the company’s revival plan.
By merging two loss-making firms- MTNL and BSNL, the government had earlier approved a Rs 69,000-crore revival package by monetising their assets. It has also given a voluntary retirement scheme (VRS) to employees so that the combined entity can be turned profitable in two years. The companies have already announced VRS schemes. According to a report by PTI, 78,569 employees of BSNL and 14,387 employees of MTNL have opted for VRS.