Mahanagar Telephone Nigam Limited (MTNL) is eyeing to raise Rs 3126 crore via bond. The state-run telecom company will raise this fund with the help of debt bonds that are guaranteed by the government. This was offered to MTNL as a part of the relief package that the center had announced earlier. Through the Rs 1.64 lakh crore revival package, the government offered BSNL and MTNL support for capex, financial support for de-stressing the balance sheet, viability gap funding for rural landlines, merger of BBNL with BSNL, settlement of AGR dues, and more.
Now, in a regulatory filing on Monday, MTNL has announced that it is looking to raise Rs 3126 crore via a debt bond that is secured by the government. All that the company is waiting for is the shareholders' nod. Once that arrives, MTNL can invite subscriptions for govt guaranteed bonds.
MTNL said, "...approval of the members be and is hereby accorded to authorise the Board of Directors of the Company to offer or invite or invite subscriptions for Government Guaranteed, Unsecured, Listed, Redeemable Non-Convertible Debentures in the nature of Bonds (NCDs), in one or more series or tranches, aggregating up to Rs 3,126 crore on Private Placement basis."
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The development was first shared by PTI. As per the publication's report, MTNL had a total debt of Rs 28,581 crore at the end of January 2023. Further, the company's net loss for 2023-24 is expected to be Rs 2,808 crore as projected by the budget.
It is also worth noting that there were also reports talking about the merger of MTNL and BSNL. Both companies also recently signed a Memorandum of Understanding (MoU) to bring synergy to their operations. BSNL is already handling the mobile services of MTNL. The merger, while has been opposed by the employee union, could take place if the government decides so.