COMPLIANCE WITH REGULATION 30 OF SEBI (LODR) REGULATIONS, 2015- NON FUNDINGOF 4TH SEMI ANNUAL INTEREST PAYMENT IN ESCROW ACCOUNT MAINTAINED IN BANK OF INDIA WRT MTNL BOND SERIES VIIID (INE153A08188)
MTNL · price
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MTNL has informed the exchanges that it could not fund the escrow account maintained in Bank of India with adequate amount for the 4th semi-annual interest payment on its 7.51% Bond Series VIIID (INE153A08188), due on March 6, 2026. The company cited insufficient funds as the reason for failing to meet this 10-day pre-funding obligation under the Tri-Partite Agreement with the Department of Telecommunications and Beacon Trusteeship. However, these bonds carry a Sovereign Guarantee from the Government of India, meaning the Debenture Trustee can invoke the guarantee and the government is obligated to make the payment on MTNL's behalf in case of default.
This signals severe liquidity stress at MTNL as the company cannot service its own debt obligations from internal funds, raising serious concerns about its financial health. While bondholders are protected by the sovereign guarantee, this event highlights MTNL's dependence on government support and may weigh negatively on investor sentiment toward the stock.