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Andrew Bonwick
Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
Mahanagar Telephone Nigam Limited (MTNL), a state-run telecom operator, on Tuesday declared that it has defaulted on payment of dues (pricipal amount and interest) to seven PSU banks. These PSU banks include Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab and Sind Bank, and Indian Overseas Bank. The total amount that MTNL has defaulted on paying to these seven banks is Rs 8,584.93 crore.
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Amongst the banks, the highest amount is due to Rs 3,733.22 crore to Union Bank of India followed by Rs 1,121 crore to Bank of India (BOI). The other banks are owned less than Rs 500 crore in an individual basis.
The company confirmed that its total financial debt amounts to Rs 34,484 crore. Out of this, Rs 8,585 crore is owned to the banks, Rs 24,071 crore in sovereign guaranteed bonds, and Rs 1,828 crore to DoT (Department of Telecommunications) to service the interest on those bonds. MTNL’s situation is not improving and this debt would certainly choke the company’s ability to grow.
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The banks would certainly be worried about recovering the due amount from MTNL as the telco’s market share is deteriorating and customers are shutting down the connections. MTNL’s shares ffell to Rs 49.49 on Tuesday, down 4.80% after this announcement.
