After VRS That Helped It Shed 14000 Employees, MTNL Begins Monetising Its Rs 23000cr Assets Including Prime Real Estate
State-owned telecom major MTNL has initiated the process to monetise assets worth Rs 23,000 crore as it aims to turn profitable in the next fiscal year, PTI reported quoting a top official of the company said on Thursday.
The proceeds of monetisation of assets of the Mahanagar Telephone Nigam Ltd (MTNL) will be used to service the debt of these public sector undertakings, (PSUs) and fund the voluntary retirement scheme (VRS)
The company has already submitted plans to the Department of Investment and Public Asset Management (DIPAM) to monetise Rs 6,200 crore worth assets that include 36 acres of land bank in Mumbai, shops-cum-offices in Delhi, and residential quarters in Noida etc.
In November last year the government announced an almost Rs 69,000 crore bailout plan on Wednesday to help loss-making state telecom providers Bharat Sanchar Nigam Ltd (BSNL) and MTNL.
The package includes raising of Rs 15,000 crore sovereign bonds to meet the immediate capital requirement of both the companies, 4G spectrum allocation worth Rs 20,140 crore, Rs 29,937 crore for VRS covering 50 percent of their employees, and Rs 3,674 crore for goods and services tax that will be levied on the allocation of radio waves.
Under the VRS scheme that the company recently offered to its employees, it received application from 14,387 employees and is likely to result in annual savings of Rs 1,700 crore for MTNL. The loss-making PSU has a total of 18,422 employees.
“We have identified assets worth Rs 23,000 crore that can be monetised. These are all prime properties in Mumbai and Delhi. We have submitted plans to monetise Rs 6,200 crore worth of assets to DIPAM. With the completion of VRS and asset monetisation, we expect to become profitable in the next fiscal,” PTI report quoted MTNL Chairman and Managing Director Sunil Kumar as saying
“We are aiming for around Rs 7,000 crore in 2020—21 through real estate asset monetisation, which as a part of revival plan will be used for debt restructuring as well as modernisation,” he said.
The company looks to realise around Rs 5,000 crore from the sale of its land parcels located at prime locations of Mumbai like Vasai hill, Mulund, Simpholi etc.
“MTNL has assets at all the prime locations. Residential as well as commercial complexes can be developed on these properties. Around Rs 1,000 crore worth assets have been initiated for monetisation in Delhi also,” Kumar said.
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, he said.
The company has started vacating prime office space Khurshid Lal at Janpath and also some parts of its corporate office in CGO building.
“I am going to substantially vacate corporate office also. MTNL is expecting to earn around Rs 500—600 crore per annum through renting,” Kumar said.
The company had posted a loss of Rs 3,388.07 crore and a revenue of Rs 2,085.41 crore in 2018-19. The total debt on the company is around Rs 20,000 crore.
The finance cost of MTNL was around 50 per cent of the revenue.