Mahanagar Telephone Nigam Limited (MTNL) is not going to be closed right now, but it won't even get any fresh funds from the government. The central government, which owns a majority stake in the publicly listed telecom operator wants the company to clear all the dues. There are dues pending till 2034 amounting to Rs 32,000 crore. The plan is to make the company clear all the dues, and then close it. However, that's not going to be anytime soon, not in this decade at least.
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MTNL has been asked by the central government to monetise its assets and also bring in efficiency in operations to reduce costs, according to an FE report. No fresh funds means that the government has completely lost its confidence in the company. In the recent past, the government has given BSNL and MTNL plenty of help through the revival packages. But such help is not going to be extended to MTNL anymore.
To ensure that shareholders are protected, the government has said that it won't shut down the company right now. Instead, the company has been asked to pay off dues, and only after that would there be a possibility of the brand being shut down completely. For now, BSNL has been instructed to run the mobile networks of MTNL, and very soon, BSNL will take on other operations as well.
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MTNL has defaulted on Rs 1600 crore worth of bank loan payments. There are sovereign guaranteed bonds issued by MTNL worth Rs 24,000 crore which have to be paid back to the bondholders by 2034. So there's no question of shutting down the company before that happens. For now, the government wants to monetise the assets which MTNL holds and start paying off the dues that the company has in its books.
