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Govt wants BSNL, MTNL merger
By siliconindia staff writer
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Friday, 08 October 2004, 19:30 IST
NEW DELHI: The government on Friday said it was considering the idea of divesting five per cent stake of BSNL to facilitate its merger with MTNL.
Another option to facilitate the process is the government buying the shares of MTNL from the market or floating a holding company with whom the shares of both BSNL and MTNL would be vested, the Communications and Information Technology Minister Shakeel Ahmad said on the sidelines of a stamp release function.
He said the government was consulting with the experts and workers to chalk out the ways and means for the merger. While MTNL is listed on both Indian and American bourses, the bigger of the two, BSNL, is wholly-owned by the government.
The process of working out the modalities of the merger would exercise the best brains as the biggest problem before them would be to work out valuation of MTNL and BSNL.
Other roadblocks could be protests from workers because of difference between pay scales and working conditions in both the companies. Ahmed said more than 95 per cent of the workers in both companies were in favour of a merger.
"The idea of the merger is acceptable to most. While working on this, we will have to ensure that there is no heartburn in any quarter," the Minister said.