1 month ago
 "telecom")
The loss-making firm has 426.8 billion rupees ($5.1 billion) of interest
The Indian government will service all future bond payments for Mahanagar Telephone Nigam Ltd. as the state-owned company faces a liquidity crisis, according to a person familiar with the matter.
The loss-making firm has 426.8 billion rupees ($5.1 billion) of interest and principal repayments due on local-currency bonds guaranteed by the government by 2034, data compiled by Bloomberg show. Of this total, 46.2 billion rupees are due later this year.
The company is no longer solvent, said the person, who requested anonymity discussing private matters. The government has already honored MTNL’s bond payment this month after the operator said it lacked sufficient funds to meet an interest payment.
A finance ministry spokesperson didn’t respond to a request for a comment.
India’s telecom industry has boomed in recent years with economic expansion and increased mobile-phone usage. However, state-run operators like MTNL have struggled to compete with private rivals including Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd. MTNL’s loss widened to 32.7 billion rupees in the year ended March 2024, from 29.2 billion rupees a year earlier.
Care Ratings this month slashed rating on the company’s 116.4 billion rupees loan facilities to D due to delays in servicing bank credit. This facility isn’t guaranteed by the government.
