Mahanagar Telephone Nigam Limited (MTNL), a state-run telecom company, has defaulted on the payment of a Rs 422 crore loan towards several banks. The company announced this in a regulatory filing on Monday. The Rs 422 crore contains Rs 328.75 crore as instalment on a principal amount and the remaining Rs 93.3 crore is towards interest on debt for June and July 2024.
MTNL has also shared the amount that it had to pay to banks individually. As per the details shared by the company, it has defaulted on the payment of Rs 155.76 crore on debt raised from Union Bank of India, Rs 140.37 crore from State Bank of India, Rs 40.33 crore from Bank of India, Rs 40.01 crore from Punjab & Sind Bank, Rs 41.54 crore from Punjab National Bank and Rs 4.04 crore from UCO Bank.
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MTNL had raised Rs 5,573.52 crore in debt from these banks. The state-run telecom company has total borrowings of Rs 7,873.52 crore from the lenders, and its total debt stands at Rs 31,944.51 crore.
The company has sought government's help for paying Rs 1,151.65 crore interest on the sovereign guarantee bonds in the current fiscal. The central government has already proposed to allocate Rs 3,668.97 crore for the payment of the principal amount of MTNL bonds.
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In other development, MTNL's operations will soon be handled by BSNL (Bharat Sanchar Nigam Limited). BSNL operates PAN-India, while MTNL's operations were limited to Mumbai and Delhi in India. BSNL has been handling the mobile networks of MTNL for a few years now, but after the debt restructuring exercise is completed by the government, the entire load of operations from MTNL will shift to BSNL. This would be a major step towards the future for both companies as MTNL has not been able to run the business profitably and a merger would not benefit either of the companies. Thus, the shifting of operations internally without merging the two companies seems like the best option at this moment.
