BSNL to raise Rs 3,000 cr to make up for budgetary shortfall

NOV 12; Within months of its creation, Bharat Sanchar Nigam Ltd (BSNL) would borrow up to Rs 3,000 crore from the market to make up for th...

NOV 12; Within months of its creation, Bharat Sanchar Nigam Ltd (BSNL) would borrow up to Rs 3,000 crore from the market to make up for the shortfall in its budget for the year 2000-2001.

"The annual budget for the current financial year remains fixed at Rs 16,500 crore and we are expecting a shortfall of between Rs 2,000 and 3,000 crore for which we will go to the market soon," Dr D P S Seth, chairman and managing director of BSNL told PTI.

Asked about the process that would be followed for borrowing, Seth said money would be raised through private placement adding that the corporation would initiate negotiations for the same with banks and financial institutions shortly.

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"We are waiting for finalisation of asset holdings and the corporation is currently holding discussions with the Finance Ministry," he said and added that "we will hit the market within this calendar year."

Earlier, Mahanagar Telephone Nigam Ltd (MTNL) used to raise money for the Department of Telecommunications (DoT), a process that was discontinued after incorporation of BSNL on October 1, this year.

In a recent move to empower the new Corporation, Government has transferred investment power of telecom commission to BSNL enabling the latter to take virtually all investment decisions.

Asked about immediate investment plans of the Corporation, Seth said "internal examination of various projects was going on and final decision with regard to investment would be taken soon, may be in a couple of months."

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The Corporation has yet to give a final shape to its structure as to whether it would be divided into four circles with BSNL as holding company or whether all circles would be created as separate holding companies of the Corporation.

Global consultants A F Furgueson, which had prepared the road map for corporatising the DTS, have been retained for another six months with the Corporation to help them become fully commercial entity.

Meanwhile the Communications Ministry has asked Ministry of Finance to exempt the newly created Bharat Sanchar Nigam (BSNL) from payment of dividend and taxes for the next five years to enable the new entity save up to Rs 1,000 crore annually.

DTS had accounted for gross profits of over Rs 7,000 crore in the last fiscal and given the current situation BSNL was likely to improve the gross margin.

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Government launched BSNL on October 1 with an authorised capital of Rs 10,000 crore while giving Rs 5,000 crore as paid-up equity.