COMPLIANCE WITH REGULATION 30 OF SEBI (LODR) REGULATIONS, 2015 NON FUNDING OF 06TH SEMI ANNUAL INTEREST PAYMENT IN ESCROW ACCOUNT MAINTAINED IN BANK OF INDIA WRT MTNL BOND SERIES VII A (INE153A08105)
MTNL · price
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Awaiting price reaction for this filing.
MTNL has informed the stock exchanges that it could not deposit the required amount into the escrow account at Bank of India for the 6th semi-annual interest payment on its 8.00% Bond Series VII A, which is due on 15 November 2025. Under the Tri-Partite Agreement, MTNL was supposed to fund the escrow account 10 days before the due date. The company has stated it does not have sufficient funds to do so. However, the bonds carry a sovereign guarantee from the Government of India, so if MTNL defaults, the debenture trustee will invoke the guarantee and the government is obliged to make the payment to bondholders.
This is a serious credit red flag showing MTNL cannot service its debt from its own cash flows, which may pressure the stock price and raise concerns about the company's financial health. For bondholders, the sovereign guarantee is expected to act as a backstop, so they are likely to receive their interest even if MTNL itself fails to pay.