New Delhi: Loss making state-owned tele comfirm MTNL has approached the government with a proposal to monetise surplus land and reduce debt. The debt laden company says it has up to Rs 5,000 crore worth of real estate that can be monetised readily.
"We have real estate available with us, which is not being effectively utilised. So, we have submitted a proposal that some of that real estate we would like to redevelop, or sell land and building...
The proceeds can be utilised for debt reduction," MTNL Chairman and Managing Director P K Purwar told PTI. MTNL had a total debt of over Rs 19,000 crore at the end of December 31, 2016.
The corporation - which offers landline and mobile telephony services in Delhi and Mumbai - has been hit hard by debt and it is borrowing money to meet its day-to-day requirements, Telecom Minister Manoj Sinha had said in a written reply to the Rajya Sabha in February this year.
Purwar said that in the first tranche nearly Rs 3,000- 5,000 crore worth of land is "readily available" for the monetisation plan but did not share the overall value of the assets it has.
"If the government allows us and if the market is favourably inclined, MTNL has the ability to raise the resources," he said.
It is already earning from renting out space and expects such rentals in Delhi and Mumbai to yield close to Rs 180 crore last financial year ended March 31.
"Many of the buildings are near the metro stations, and have a huge commercial potential. In case where the land comes with certain restrictions and clauses, we can work with the government and developmental agencies to fully utilise the potential of the buildings," he said.
MTNL, he said, is open an outright sale of land where no such restrictive clauses apply. It had approached the Telecom Department with the proposal 3-4 months back but is yet to hear from the government.
Asked if the telecom corporation is rolling over debt or has started repaying part of the borrowings, Purwar said, "No, unless the monetisation falls in place we will not be able to reduce our debt."
"At this stage, we don't have other plans. We think this is the way... We have certain assets which are not giving us high returns. So it makes business sense to part with the land and buildings, that we don't require," he pointed out.
MTNL's losses narrowed to Rs 2,005.74 crore in 2015-16, from Rs 2,893.39 crore in 2014-15.
In 2013-14, the company had logged profit of Rs 7,825.13 crore, mainly on account of write -back of amortisation of broadband wireless access (BWA) spectrum amounting to Rs 11,620.9 crore....