VSNL set to hive off its surplus land

Tata-OWNED Videsh Sanchar Nigam Ltd (VSNL) has decided to hive off its surplus land in favour of Government of India as per a shareholders&#...

Tata-OWNED Videsh Sanchar Nigam Ltd (VSNL) has decided to hive off its surplus land in favour of Government of India as per a shareholders’ agreement signed with the government in February 2002.

The company has received a draft scheme of demerger from the strategic partner and it is being included in the agenda for its board meeting scheduled to be held on April 11, 2005, VSNL said in a notice to the stock exchange.

While divesting its equity stake in VSNL in 2002, the GoI decided to hive off 773 acres of surplus land in Pune owned by the company into a separate entity.

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As part of the agreement, the strategic partner, ie. the Tatas was supposed to facilitate the process.

The land is expected to fetch close to Rs 2,000 crore at today’s market value, should the government decide to sell it.

Interestingly, the Tatas are not expected to get any sales proceeds, as the land was hived off into a separate company before the government sold off VSNL to the Tatas.

The Tata group had paid close to Rs 1,439 crore to the Union government to buy their equity in VSNL and came out with an open offer of shares which cost them another Rs 1,151 crore.

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