Question: Recently, Cabinet approves formation of 100% owned C Corporation of Telecommunications Consultants India Ltd. (TCIL) in which of the given?
- On March 21st, 2018, the Union Cabinet chaired by Prime Minister Shri Narendra Modi has given its approval for formation of 100% owned C Corporation of Telecommunications Consultants India Ltd.(TCIL) in USA as per the details given below:
- Formation of C Corporation of Telecommunications Consultants India Ltd. (TCIL) in the state of Texas, USA with authorization for registering in other states of USA for doing business subsequently.
- TCIL’s Equity Investment of 100% in the C Corporation amounting to USD 5 Million (equivalent to INR 33.84 crores taking the exchange rate as Rs. 67.68)in a phased manner.
- TCIL’s submission of Counter Guarantees amounting to USD 5 Million to Lenders of Loans/ Facilities / Vendors and also client for Bid bonds / Advance/ Performance Guarantees etc. required in connection with the execution of Projects in USA.
- C Corporation will be earning precious foreign exchange for the country and increasing profitability of TCIL which is a Government PSU.
- C Corporation is formed in the state of Texas, USA in connection with the execution of Projects in USA.
- The newly formed C Corporation shall earn an estimated profit of around 10% in the initial years with turnover of USD 10 Million, which may get increased subsequently depending upon the volume of work.
- Formation of C Corporation in USA shall help TCIL to expand its business/ turnover/profits and ultimately result in increased dividend to the Government being a State PSU.
- Total investment of USD 5 Million will be made by TCIL in the form of Equity from its internal resources.
- TCIL may also be required to provide Counter Guarantees of around USD 5 Million for getting finances in US for expansion of business and also Bid Bonds/ Advance Payment Guarantees/ Performance Bank Guarantees to Govt. authorities/ Final client on behalf of C Corporation.
- As such there will be no financial implication on the part of the Government.