Rediff On The Net, Infotech: VSNL employees may gain Rs 120,000 each


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January 28, 1999

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VSNL employees may gain Rs 120,000 each

Videsh Sanchar Nigam Limited employees are likely to gain Rs 120,000 each because of the government's decision to divest the company's stock at Rs 294 per share. The current market value is more than Rs 900.

The cabinet has also approved the financial restructuring of Hindustan Cables Limited and decided, in principle, to corporatise Ennore Port Limited on the lines of the corporatisation of five major airports.

T O D A Y

• NASSCOM '99
• HP's new home PCs
• VSNL divestment
• Millennium products

Briefing reporters after an hour-long cabinet meeting, presided over by Prime Minister Atal Bihari Vajpayee, Information and Broadcasting Minister Pramod Mahajan said yesterday that the cabinet has formulated a Rs 1.43 billion package for the sick HCL.

Of this, Rs 750 million would be invested in the form of equity through non-plan assistance and a one-time grant of Rs 680 million would be given to the company for implementation of the voluntary retirement scheme for its 1,660 employees out of more than 5,200 workers.

Describing the cabinet decision as "labour-friendly", Mahajan said each employee would be allowed to purchase only 200 shares each.

The lock-in period would be three years to check misuse. The shares would be transferred to employees within three months.

He said the total equity offered to VSNL employees works out to 600,000, about 0.6 per cent of the total equity capital.

He said the proposal of giving equity to the employees came up first in 1991-92, when the VSNL divested its shares for the first time.

Referring to the revival of HCL, Mahajan said the government has directed the Department of Telecom to place at least 30 per cent of its order with HCL in the first year to make it financially viable.

DoT will place 25 per cent of its order in the second year of operation, after that there would be a fresh review of the functioning of the public sector company.

He said the cabinet also approved that the corporatisation of the Jawaharlal Nehru and Haldia ports would be taken up in the second phase.

The surface transport ministry would work out details in this regard and submit it to the cabinet at the earliest for its approval.

- Compiled from the Indian media

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