Government to write off ITI losses to hive off viable unitsJune 30th, 2009 - 8:57 pm ICT by IANS
Bangalore, June 30 (IANS) The government would write off Rs.2,820 crore (Rs.28.2 billion) losses accumulated by Indian Telephone Industries (ITI) Ltd to enable the state-run undertaking hive off its viable units for private partners, a top official said Tuesday.
“We will write off about Rs.28.2 billion (in losses) accumulated by ITI during the last two-three years to kickstart its revival with a clean slate. We want the company to flourish by diversifying, collaborating and bidding for new projects,” Telecom Secretary Siddhartha Behura told reporters here at a function.
This is the second time the government is stepping in to rescue the ailing unit after a Rs.1,025 crore bailout package in 2005-06.
“In order to revitalise the company and make optimal utilisation of its assets, human capital, technology and huge land bank, a consultant will be appointed by July-end to work out modalities for hiving off viable units through a global tender,” Behura said after inaugurating the next-generation data centre in the ITI campus in collaboration with Mumbai-based Trimax Datacentre Services Ltd.
The consultant will draw up a framework to invite expressions of interest from strategic investors and global telecom equipment manufacturers.
“We expect the entire process to be completed by this year-end. The government will continue to hold majority stake even after strategic divestment,” Behura pointed out.
The Bangalore headquartered ITI has six manufacturing units - three in Uttar Pradesh at Mankapur, Rae Bareli and Naini, one each at Srinagar in Jammu and Kashmir, Palakkad in Kerala and the main facility in Bangalore.
Three of the six units are said to be profitable.
The government holds around 93 percent of the 61-year-old telecom behemoth’s equity, and the remaining is largely held by the public.
It has about 13,000 employees on its rolls.
“ITI will continue to focus on its core activities of manufacturing telecom equipment and diversify into strategic areas to keep afloat,” Behura added.
The company has an order book of Rs.6,800 crore, including fresh orders to the tune of Rs.3,200 crore secured this fiscal (2009-10).
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Tags: bailout package, clean slate, core activities, crore, expressions of interest, generation data, global telecom, global tender, iti ltd, majority stake, naini, optimal utilisation, palakkad, private partners, rae bareli, rs 2, siddhartha, srinagar, telecom equipment manufacturers, trimax