COMPLIANCE WITH REGULATION 30 OF SEBI (LODR) REGULATIONS, 2015- NON FUNDING OF 4TH SEMI ANNUAL INTEREST PAYMENT IN ESCROW ACCOUNT MAINTAINED IN BANK OF INDIA WRT MTNL BOND SERIES VIIIB (INE153A08162)
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MTNL has informed exchanges that it could not deposit adequate funds into the escrow account at Bank of India for the 4th semi-annual interest payment on its 7.61% Bond Series VIIIB (INE153A08162), due on August 24, 2025. As per the Tri-Partite Agreement, MTNL was required to fund the escrow account 10 days before the due date, but insufficient funds prevented this. The bonds are sovereign guaranteed by the Government of India, and in case of default, the Debenture Trustee can invoke the sovereign guarantee, with the Government obligated to make the payment.
This signals significant financial distress at MTNL as the company cannot meet even scheduled interest obligations from its own cash flows. While bondholders are protected by the sovereign guarantee, repeated inability to fund escrow accounts raises serious concerns about the company's standalone financial health and may put pressure on the Government to step in.