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G. Rambabu

"The small equity base of only Rs 88 crore has made the company highly dependent upon market borrowing at high. This is sought to be rectified," the sources said

NEW DELHI, April 10

WITH thenet worth of telecom equipment manufacturer ITI Ltd fast eroding, the public sector undertaking has dashed off an SOS to the Department of Telecommunications (DoT) seeking "urgent" financial assistance up to Rs 725 crore to prevent it from being referred to the BIFR this fiscal.

According to official sources, having already logged up losses of Rs 188 crore in the first nine months of fiscal 2002-03, the company expects to close the yearwith losses topping Rs 200 crore which would see its net worth being completely wiped out.

Being the only public sector telecom equipment manufacturer in the country, it has sought the DoT's intervention by way of financial assistance and an overall restructuring package to put it back on track.

The sources noted that while the company has sought Rs 390 crore to support its VRS package for around 7,000 employees in the current year, Rs 200 crore have been sought as equity infusion and Rs 134 crore as reimbursement for the VRS packages that it has enforced since 1991.

Despite shedding 6,365 employees since 1991, the company still has a surplus manpower of around 11,000, which it hopes to slowly shed over the next couple of years.

"The small equity base of only Rs 88 crore has made the company highly dependent upon market borrowing at high. This is sought to be rectified," the sources said

Apart from this "urgent" infusion of funds, the company has also forwarded a long-term plan, which envisages capital expenditure of Rs 480 crore in the next four years. The capital expenditure is to be met by soft loan at the interest rate of four per cent per annum from the Government repayable in ten equal annual instalments. Alternatively, the Government may give interest subsidy and guarantee to allow the company to raise this money by way of bonds.

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