NEW DELHI: Now that the first step in reviving state-run telcos BSNL and MTNL has drawn to a close, with over half of their combined workforce opting for the Voluntary Retirement Scheme (VRS), sources say that the companies have turned their attention to another pressing problem: raising cash.
According to sources, by the end of the VRS window on December 3, 92,700-odd employees had opted for early retirement. This is likely to save the two beleaguered telcos around nearly Rs 9,000 crore per annum in wage costs.
Data on the two companies’ financials show that employee wages drain over 75 per cent of the combined revenues of the two firms. BSNL’s employee costs in FY19, for instance, stood at a whopping Rs 14,492 crore, compared to a revenue of Rs 19,308 crore and a loss of Rs 14,903 crore during the same year.
Now, the two telcos which are heading for a merger are turning their focus to raising funds, say sources.
Last week, MTNL had announced that it will hold an extraordinary general meeting on 8 January to seek approval from its shareholders on plans to raise funds worth Rs 6,500 crore and simultaneously get clearance for monetisation of assets owned by the firm.
According to the firm, it plans to issue non-convertible debentures amounting to Rs 6,500 crore on a private placement basis to raise these funds.
The company’s board of directors has identified assets it plans to monetise, including vast tracts of land, buildings, towers and fiber assets, according to the Department of Investment and Public Asset Management’s (DIPAM) guidelines.
“(We seek) the consent of the shareholders to monetise towers and fiber assets as specified/identified by the board by following an appropriate model including leasing after considering the market conditions with the aim to maximise the returns as per the revival plan of the company, as approved by the union Cabinet,” the company said.
Wage costs over 75% of revenues
Data shows that employee wages drain over 75 per cent of the combined revenues of the two firms. BSNL’s employee costs in FY19 stood at Rs 14,492 crore.