(Bloomberg) -- State-run Mahanagar Telephone Nigam Ltd., which has fallen short of funds to honor its debt due later this week, has 48.1 billion rupees ($576 million) of local-currency bonds to service for the rest of 2024, highlighting possible struggles ahead for the firm.
The telecom company last week said it couldn’t transfer an adequate amount of interest on its 7.59% July 2033 bonds, which are guaranteed by the government. It has interest payment due on 14 bonds between July and December, data compiled by Bloomberg show.
MTNL reported a loss of 32.7 billion rupees in the year ended March 2024, higher than a 29.2 billion rupees loss in the previous year as its subscriber base dwindled. While India’s telecom industry has boomed in recent years, state players such as MTNL and Bharat Sanchar Nigam Ltd. have struggled to keep pace with private peers.
The government will help MTNL avoid a default by paying outstanding bond interest, while also working to restructure its debts, the Economic Times reported on Sunday.
Assessors Care Ratings and India Ratings & Research are closely monitoring the situation as the government needs to deposit 941.2 million rupees to a designated escrow account on or before Wednesday for the upcoming payment due on July 20.
“MTNL’s insufficient cash generation from operations and slow progress in asset monetisation worsened its liquidity position,” Care Ratings said in a statement on Saturday, adding this has “resulted in delays in debt servicing of its bank facilities” as well, which are not guaranteed by the government.
It slashed the rating on MTNL’s 116.4 billion rupees bank facilities to D earlier this month.
Below are the details of its upcoming rupee-bond payments:
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