COMPLIANCE WITH REGULATION 30 OF SEBI (LODR) REGULATIONS, 2015 - NON-FUNDING OF 04TH SEMI ANNUAL INTEREST IN ESCROW ACCOUNT MAINTAINED IN BANK OF INDIA WRT MTNL BOND SERIES VIIIA (INE153A08154)
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MTNL has informed stock exchanges that it could not deposit adequate funds into the Bank of India escrow account for the 4th semi-annual interest payment on its 7.59% Bond Series VIIIA (INE153A08154), due on 20th July 2025. Under the Tri-Partite Agreement, MTNL was required to fund the escrow 10 days before the due date. The company cited insufficient funds as the reason for non-compliance. However, MTNL clarified that all its bonds are Sovereign Guaranteed by the Government of India, and in case of any default, the Debenture Trustee can invoke the guarantee, obligating the government to make the payment.
This signals severe liquidity stress at MTNL, as it is unable to meet even semi-annual interest obligations on its own. While bondholders are protected by the Government of India sovereign guarantee, it highlights MTNL's deep financial difficulties and may weigh negatively on shareholder sentiment and the stock price.