Mahanagar Telephone Nigam Ltd-latest-market-updates-1114
MTNL Defaults on Rs 422 Crore Loan Repayment to Multiple Banks
MTNL defaults on Rs.422.05 crore loan payments, impacting multiple banks as the company’s debt totals Rs.31,944.51 crore, requiring government assistance for financial stability.
State-owned telecom company MTNL is in the news as it has defaulted on bank loan payments totaling Rs.422.05 crore, according to a regulatory filing on Monday. The default includes Rs.328.75 crore on principal installments and Rs.93.3 crore in interest for the months of June and July.
Default Details
According to the details shared by MTNL, the company defaulted on payments to several banks: Rs.155.76 crore to Union Bank of India, Rs.140.37 crore to State Bank of India, Rs.40.33 crore to Bank of India, Rs.40.01 crore to Punjab & Sind Bank, Rs.41.54 crore to Punjab National Bank, and Rs.4.04 crore to UCO Bank. These defaults majorly come from the debt that MTNL initially raised, amounting to Rs.5,573.52 crore from all of these banks.
Total Borrowings & Debt
MTNL, a loss-making company now, has accumulated total borrowings of Rs.7,873.52 crore from banks and financial institutions due to which the overall debt of the company currently stands at a staggering Rs.31,944.51 crore.
Government Assistance & Budget Allocation
In light of this financial strain, MTNL has sought Rs.1,151.65 crore from the government to cover the interest payments arising from sovereign guarantee bonds in the current fiscal year. Additionally, the government, in its budget, has proposed an allocation of Rs.3,668.97 crore to cover the principal amount of MTNL bonds.
Conclusion
In conclusion, MTNL’s financial troubles have led to a significant default on loan repayments for the company, directly impacting multiple banks. With total debts nearing Rs.32,000 crore, the company is heavily reliant on government assistance to manage its financial obligations. Although the proposed budgetary support may provide some relief, the long-term financial health of MTNL remains uncertain. The company’s extensive debt and ongoing financial losses showcases the challenges it is facing in stabilizing its operations and meeting its repayment commitments.
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