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Thomas K Thomas

New Delhi, July 30 The deadlock between the Government and the employees union of Bharat Sanchar Nigam Ltd on the proposed Initial Public Offering continued after two rounds of meeting held over the last week.

The company has proposed to dilute about 10 per cent stake through the IPO and has the support of the Communication Ministry and the Finance Ministry.

However, the union is opposing it and had also threatened to go on a nationwide strike several times.

While BSNL management had earlier withdrawn the IPO plans following opposition from the union, it has renewed its efforts to list the shares on the bourses after the Left parties withdrew support to the UPA Government.

The BSNL employees’ union, which has the backing of the Left parties, admitted that the political development at the Centre may have weakened their negotiating powers.

But the union is planning direct action, including a strike, if the Government does go ahead with the IPO.

“The employees of BSNL will continue to oppose any move to go for an IPO as it is detrimental to the interest of the company. We will be meeting shortly to discuss the future course of action as the management seems to be moving ahead with its plans despite our objections,” Mr V. A. N. Namboodiri, General Secretary, BSNL Employees Union, told Business Line.

In a bid to win the union’s support, BSNL has also offered to use some part of the proceeds from the proposed IPO for ramping up the company’s pension fund.

Government sources said that the company has been asked to go prepare for the IPO in order to generate funds for BSNL’s aggressive roll-out plans.

The company is in the midst of finalising a tender for 90 million lines worth about $9 billion.

In addition, the telecom major has plans to roll out CDMA-based mobile network and a pan-India broadband infrastructure.

The company, which has nearly 70 million subscribers, is valued at around $100 billion.

A 10-per cent dilution would fetch about $ 10 billion, making it the biggest IPO in India.

More Stories on : Telecommunications | Trade & Labour Unions | IPOs

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