MTNL Defaults on Yet Another Payment

According to the agreement, MTNL has to deposit the interest amount 10 days before the due date into an escrow account. However, MTNL is not in a position to do that. The debentures which MTNL had issued are non-convertible in nature.

Highlights

  • Mahanagar Telephone Nigam Limited (MTNL), a state-run Indian telecom operator, has defaulted on payments in the past.
  • The company has done it yet again.
  • This highlights the financial troubles MTNL is going through.

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mtnl defaults on yet another payment

Mahanagar Telephone Nigam Limited (MTNL), a state-run Indian telecom operator, has defaulted on payments in the past. The company has done it yet again. This highlights the financial troubles MTNL is going through. Much recently, MTNL said in a regulatory filing that it doesn't have the money to pay interest on the Rs 6,109.6 crore worth of bonds that it had raised money through. These bonds were issued in November 2022. It is worth noting that these are soverign backed bonds, meaning, if MTNL doesn't have the capacity to pay, the government of India will have to do that.




Read More - BSNL Recently Transferred Over 800 Executives Across India: Report

According to the agreement, MTNL has to deposit the interest amount 10 days before the due date into an escrow account. However, MTNL is not in a position to do that. The debentures which MTNL had issued are non-convertible in nature. This means that the debenture holder can invoke the soverign guarantee and make the government pay on behalf of MTNL.

MTNL operates in Delhi and Mumbai. The company's operations are in the process to be completely taken over by BSNL. MTNL will exist as a brand in the front, but will be run through BSNL in the backend.

Reported By

Tanuja is a passionate technology and telecom buff who has been following the telecom industry for several years now.

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