The government has provided a letter of comfort (LoC) to the tune of Rs 30,000 crore to BSNL, which will enable the state-run telecom firm to raise loans to meet its capital expenditure. As per sources, earlier the LoC was in the range of Rs 15,000 crore to Rs 20,000 crore, but now it has been raised, as the company will be rolling out its 4G network, for which it requires at least Rs 12,000 crore.
Besides, BSNL has to pay its vendors, the dues for which run into over Rs 10,000 crore. For instance, network provider Nokia alone has over Rs 2,000 crore of dues pending from BSNL. The sources said clearing Nokia’s dues is one of the top priorities of BSNL before it comes out with a tender for rolling out its 4G network. BSNL has sought a loan of Rs 4,000 crore to Rs 5,000 crore from State Bank of India
(SBI) to meet its immediate capex requirements. The loan is likely to be approved soon. Over the past few years, the state-run firm has secured loans of around Rs 20,000 crore and will raise another Rs 10,000 crore in the near future.
The government has cleared a Rs 70,000-crore revival package for BSNL and MTNL, but the LoC will be over and above the package.
The biggest chunk of the revival package, Rs 29,937 crore, will be towards a voluntary retirement scheme (VRS) for employees above 50 years of age. This will comprise Rs 17,169 crore ex-gratia amount and Rs 12,768 crore towards pension, gratuity and commutation. Of the 1 lakh eligible employees for VRS, 78,560 have opted for the scheme. By the end of January 31, all these employees will be provided a retirement package.
The government believes that by reducing the huge workforce of the firm, 1.65 lakh employees of BSNL for instance, which eats up 77% of its revenues in payment of salaries, the companies can become competitive and profitable over a period of time.
Apart from VRS, the government will be providing Rs 23,814 crore towards administrative allocation of 4G spectrum to these firms. The two firms will also raise long-term bonds of Rs 15,000 crore for which sovereign guarantee will be provided by the government. With this amount the two firms will restructure their existing debt and also partly meet their capex, opex, and other requirements. The government also said the two PSUs would monetise their assets like land etc worth Rs 38,000 crore over a period of four years.