Disinvestment Current Affairs - 2019
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The Union Cabinet on October 23, 2019 approved the proposal for revival of BSNL and MTNL. It allotted the 4G spectrum to the institutions. The MTNL will act as a subsidy to BSNL. A four-step revival plan has been announced for BSNL. Also, the GoI plans to raise Rs 15,000 crore through sovereign bonds.
Both BSNL and MTNL were making losses for the state since a long time. MTNL is Mahangar Telephone Nigam Limited, a state-owned entity that provides telecom services at New Delhi and Mumbai and in Mauritius. It was founded in 1882. There are around 25,191 employees working with the company.
The BSNL loss is estimated to be around Rs 14,000 crore with a decline in revenue of Rs 19,308 crores during 2018-19. The loss of MTNL was around Rs 755 crores (in Q4, May 2019). The companies hold salary dues and pension dues for the employees. The total debts held by the companies amount to Rs 40,000 crores.
With merger under Rs 70,000 crore plan and 4G spectrum offering will help the entities in monetizing their assets. They can raise capital expenditure required to roll out the network and bring in efficiency in their operations.
Tags: 4G service • 5G • BSNL • BSNL. MTNL • Disinvestment
The Union Cabinet headed by Prime Minister Narendra Modi has given ex-post facto approval for the creation of the Special Purpose Vehicle (SPV) and associated activities for the disinvestment of Air India and its subsidiaries/JV.
Air India Assets Holding Ltd.
- Debt of Air India Ltd. amounting to Rs. 29,464 crore would be transferred to Air India Assets Holding Ltd.
- The subsidiaries which are not part of Air India strategic disinvestment viz. Air India Air Transport Services Ltd. (AIATSL), Airline Allied Services Ltd. (AASL), Air India Engineering Services Ltd. (AIESL) and Hotel Corporation of India Ltd. (HCI) would be shifted to the special purpose vehicle.
- Non-core assets, painting and artefacts and other non-operational assets of Air India Ltd would also be transferred to the SPV.
- The board of directors of the SPV includes Director Finance as well as the chairman and managing director of Air India along with joint secretaries of Corporate Affairs, Investment and Public Asset Management, Expenditure, Economic Affairs.
The disinvestment proceeds from the Air India would be utilized to set off the working capital loan liability of Air India which are not backed by any asset and warehoused in the same SPV.