New Delhi: The government opposes the merger of the idea of ​​vodafone surrounded by BSNL and state-owned MTNL, some sources have told TII.
Stand came for weeks after Industrialist Kumar Mangalam Birla said that he was “willing to give up” 27% of his shares on Telco which was paralyzed to “any entity – public sector / financial / domestic entity” on behalf of “national interests”.
Government sources say “strong and strong logical reasons” suggest “direct rejection” of every proposal that gets a private entity that is full of debt and losses in folds of state-owned companies, which themselves have a bad track record that is poorly managing their business and operations especially Behind the government bailout repeatedly.
“How can we allow this.
It’s almost like having a profit privatization, and nationalization of losses?” A senior officer said.
Birla’s call seems to be in accordance with the suggestions made in the Deutsche Bank report.
“…
The only decent solution is to recapitalize the idea of ​​vodafone by turning its debt into equity, preferably, while combining it with BSNL, and then giving it a clear commercial mandate based on profitability and incentive targets,” said in a recent note.
Deutsche Bank added that “If this happens, the Vodafone Shareholders of the idea will be very diluted because the government’s debt is about six times the current market cap (telco), and such solutions may be acceptable results to shareholders.” The amount, however, was stacked on the suggestion.
Vodafone’s idea, the third largest telecommunications operator with around 27 crore customers, is under heavy debt, because Rs 96,300 Crore to the government in the suspended spectrum payment, while responsible for the 61,000 RS crore against AGR liabilities.
The obligation comes with an interest expense of thousands of crores, with the company has another debt of RS 23,000 Crore Bank.
His losses in the previous two quarters have exceeded Rs 7,000 Crore.
On the other hand, BSNL and MTNL must be distributed RS 69,000 Crore Revival packages around 2019 to keep them survive, and still struggle to achieve profitability.
According to the State Minister (Communication) Devusinh Chauhan at Rajya Sabha on August 5, BSNL’s total obligation reached Rs 81,156 Crore at the end of FY21 while MTNL at RS 29,391 Crore.
“It will be a financial chaos if all entities that struggle are put together and combined.
What goals are served? In fact, if their operation is put together, it can turn into a financial channel that is even greater at the added value in the coming years if the operation does not turn around, “An officer said.
“However, instead of being very considered for inefficient private entities, the government can focus more on the combination of BSNL / MTNL and give them more funds to make it competitive and change it.” Niti Aayog, who has operated with problems by the telecommunications department, also opposes proposals.
The government think-tank feels that every such step can also see the “erosion value” of Vodafone’s idea, and therefore not much can be left in the agreement to get from BSNLMTNL.
Some officers said cultural differences between the two entities were also reasons that could make a merger “Definite Failure”.
“BSNLMTNL has no aggressive private sector attitude, and their employees agreed and burdened with labor issues and trade unions.
On the other hand, Vodafone and ideas cannot even manage their own merger properly, which is one of the reasons behind the collapse of the company Together.
“Other officers said there was a” much legal problem “which made it a difficult deal.
“MTNL is registered, and so is the idea of ​​Vodafone,” the officer said.