Mahanagar Telephone Nigam Limited (MTNL) has announced it will not be able to fund the escrow account for the semi-annual interest payment on its 7.75% Bond Series VII E due on 24 March 2026.
The company cited insufficient funds as the reason for its inability to meet the funding requirement, which is mandated by a Tri-Partite Agreement involving MTNL, the Department of Telecommunications, and Beacon Trusteeship Limited. This agreement requires MTNL to deposit the necessary amount into the escrow account at Bank of India 10 days before the due date. Despite the bonds being sovereign guaranteed by the Government of India, MTNL’s failure to fund the account could lead to the invocation of the sovereign guarantee by the debenture trustee, obligating the government to cover the payment.
Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).
This article is written by Business Desk and reviewed by Markets Desk before publication.