BSNL to Create Special Purpose Vehicle for Selling Real Estate and Reducing Debt

The government is mulling to transfer land assets and loans of loss-making BSNL to a special purpose vehicle in an effort to make the state-owned telecom firm a debt-free entity. As per a new PTI report, employees Union of BSNL, however, has alleged that the land parcels proposed to be transferred to the SPV at a value of Rs 20,210 crore are at prime locations of big cities and are “grossly undervalued”. BSNL management denied the allegations saying the valuation has been done only on indicative basis and final valuation will be done before disposing of the proposed land parcels. The SPV is proposed to sell the land parcel and pay off BSNL debt estimated to be around Rs 15,000 crore.

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BSNL Assets Highly Undervalued

“It is astonishing to note that in the name of monetisation of lands, for the purpose of making BSNL a debt-free company, BSNL’s land are being transferred to the SPV at a “throwaway price,” BSNL Employees Union said in a letter to the telecom secretary. The union said that the market value of the 63 land parcels identified for transfer to SPV is very high. However, these are being transferred at a “dirt-cheap price” in the name of book value.

When contacted BSNL Chairman and MD P K Purwar said, “Such allegations are baseless and incorrect since the valuation has been done on indicative basis for the purpose of preparation of cabinet note. Final valuation will be done by a government registered valuer. The SPV proposed is also 100 per cent owned by the government of India like BSNL”.

BSNL SPV Created to Sell Land to Corporates and Entrepreneurs

The union said that it gathered information around the land parcel of Chennai and Kerala circle and found them grossly undervalued. “In Chennai City, 8 land parcels are being transferred by BSNL to the SPV. The total market value of these land parcels has been determined by the BSNL management as Rs 2,753.67 crore. Whereas, the market value of these 8 land parcels comes to Rs 3,867.89 crore. Thus, it could be understood that in Chennai city alone, the BSNL’s land parcels are being undervalued by Rs 1,262.89 crore,” the letter said.