In order to merge the ailing state-owned telcos, Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL), the central government is looking into the process of delisting MTNL from share markets, the Economic Times (ET) reported on Wednesday.
A senior official of the Department of Telecommunications told ET, "The legal complexities are being looked into. We have appointed a consulting firm as an advisor. We expect to complete the merger of MTNL and BSNL by the end of next year but before that we need to delist MTNL from the stock exchanges.”
The official also said, “For revival of both public sector firms, the merger is necessary. One entity needs to operate at a pan India level to provide seamless services to consumers. Now that BSNL’s 4G services are ready to be launched, the process of merger has been put on a fastrack mode.”
He added that the delisting will be a long process and the government already had a few rounds of discussions with the markets regulator Securities and Exchange Board of India (SEBI).
BSNL has appointed Deloitte as a consultant for the process, the report said, adding that the external advisor would provide a detailed report on the legal issues and how to move forward with the delisting process.
In July last year, Union Cabinet approved the revival package of BSNL amounting to Rs 1.64 lakh crore.
In 2019, the Center approved a Rs 69,000 crore revival package for BSNL and MTNL that included merging the two loss-making firms, monetising their assets, and giving Voluntary Retirement Scheme (VRS) to employees so that the combined entity turns profitable in two years. The package approved includes the infusion of Rs 20,140 crore capital for the purchase of 4G spectrum.
The total debt on both companies stood at Rs 40,000 crore in 2019, of which half of the liability is on MTNL alone.