Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) are gearing up to raise about $2.34 billion. According to a Reuters report, both the state-run telcos are planning to raise funds through government-guaranteed bonds. Here, MTNL wants to raise about Rs 109.10 billion and is set to seek bids next week. MTNL will meet bankers and investors on Tuesday, the report said, quoting three merchant bankers aware of the developments.
MTNL is looking to issue bonds that will mature in 10 years and will pay a semi-annual coupon. It is just how central government bonds are priced. BSNL and MTNL, as a part of the relief measures, received a sovereign guarantee to raise Rs 84.46 billion and Rs 109.10 billion, respectively. MTNL would use the proceeds to service bank loans and older bonds. MTNL last tapped the bond market in the December 2020 quarter as it raised around Rs 65 billion through two 10-year govt guaranteed bond issuances at a semi-annual coupon of 6.85% and 7.05%. BSNL could also launch a 10-year bond issuance by the end of this year, said the report.
Back in September 2020, BSNL raised around Rs 85 billion through 10-year bonds at a semi-annual coupon of 6.79%. Both state-run telecom companies need help from the government to run and fund their business, as neither has made profits in the longest time.