MTNL Defaults On Rs 422.05 Cr Bank Loan Payments

State-owned telecom company Mahanagar Telephone Nigam (MTNL) has defaulted on bank loan payments amounting to Rs 422.05 crore, according to a regulatory filing made on Monday. The default includes Rs 328.75 crore on the principal instalment and Rs 93.3 crore in interest payments for the months of June and July.

MTNL has provided details of the defaults across various banks, including Rs 155.76 crore from Union Bank of India, Rs 140.37 crore from State Bank of India, Rs 40.33 crore from Bank of India, Rs 40.01 crore from Punjab & Sind Bank, Rs 41.54 crore from Punjab National Bank, and Rs 4.04 crore from UCO Bank.

The telecom firm had previously raised Rs 5,573.52 crore in debt from these banks. MTNL, which has been incurring losses, currently has total borrowings of Rs 7,873.52 crore from banks and financial institutions, with its overall debt standing at Rs 31,944.51 crore.

In response to the financial strain, MTNL has requested Rs 1,151.65 crore from the government to cover interest payments arising from sovereign guarantee bonds in the current fiscal year. Additionally, the government has proposed an allocation of Rs 3,668.97 crore in the budget for the payment of the principal amount of MTNL bonds.

This financial turmoil underscores the ongoing challenges faced by MTNL as it struggles to manage its substantial debt while attempting to sustain its operations in the competitive telecom sector. The government's financial support will be crucial in addressing the immediate debt obligations and ensuring the company's viability.