Telephone operator MTNL intends to cut a part of its mammoth Rs 13,000 crore debt, the firm’s CMD AK Garg told CNBC-TV18.
Garg said an amount of Rs 4,534 crore that the government will pay to the debt-laden state operator for surrendering its 4G spectrum will be used to entirely to retire debt. “The amount should come in this quarter itself,” he said.
Garg conceded that the company had been building on excess land bank and built space in Delhi and Mumbai and said these would also likely be used towards reducing debt. “We and the government will decide whether we will go for a public-private partnership model or an outright sale,” he said.
Also read: Cabinet clears Rs 11,258 cr refund for BSNL, MTNL spectrum
Below is the transcript of the interview.
Q: With respect to the Rs 11,000 crore refund that was announced to be given to BSNL and MTNL, what will you get? And will the entire amount come through in one go in the January to March quarter?
A: About Rs 4,534 crore will come to MTNL and we expect this amount during this financial year.
Q: Will this come through in one go or will it be staggered?
A: We are yet to see the detailed order but as per the proposal, this amount should come in this quarter itself.
Q: What is the debt on the books currently and what will this amount be used to immediately repay debt? What would be the lesser stress that we could see on the balance sheet?
A: We have debt of more than Rs 13,000 crore. The government has decided about the pension issue as well as refunding the BWA amount. No doubt it is without interest but both will help company to tide over the present situation.
The debt will come down by Rs 4,500 crore and the pension issue will give us good advantage because we have provisions for pension to the tune of Rs 9,000 crore in our books. So, those will be written off and we will get advantage of almost Rs 400 crore per annum by government taking over the pension.
Further, there will be advantage to the tune of Rs 1,000 crore cash because MTNL has been paying pension from 2000 up till now. So, on settlement, we expect around Rs 1,000 crore, which will be adjusted against future government liabilities. So, it is a good deal for MTNL.
Q: How much did the company invest in the BWA in 2010?
A: We paid Rs 4,534 crore but we took loan and paid this money. So, yes, it is a loss of interest to the company but we are getting back the amount.
Q: Any other relief measures that the government is contemplating?
A: We expect more from the government. A committee of group of ministers has been formed for revival of MTNL and BSNL. We expect monetization and certain more issues to be taken up in the meeting and we expect some more favours from the government.
Q: What are the real estate monetization plans? You have around 0.78 million square feet of built-up office space plus land parcels in Mumbai and Delhi?
A: MTNL has got excess built-up space. We have got some flats and shops that we are not using at present, which MTNL had purchased long back. We have some land bank also.
We can monetise those. We and the government will decide whether we will go for a public-private partnership model or an outright sale.
We also have some land banks and surplus built-up space that we intend to put on long-lease and are seeking government approval.
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