COMPLIANCE WITH REGULATION 30 OF SEBI (LODR) REGULATIONS, 2015 - NON-FUNDING OF05TH SEMI ANNUAL INTEREST IN ESCROW ACCOUNT MAINTAINED IN BANK OF INDIA WRT MTNL BOND SERIES VIIIA (INE153A08154)
MTNL · price
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Awaiting price reaction for this filing.
MTNL has informed the stock exchanges that it could not fund the escrow account maintained with Bank of India for the 5th semi-annual interest payment on its 7.59% MTNL Bond Series VIIIA (INE153A08154), due on January 20, 2026. Under the Tri-Partite Agreement, MTNL was required to deposit adequate funds into the escrow account 10 days before the due date. The company cited insufficient funds as the reason for the non-funding. MTNL clarified that the bonds are sovereign guaranteed by the Government of India, meaning that in case of default, the Debenture Trustee can invoke the sovereign guarantee and the government is obligated to make the payment.
This is a significant negative signal for shareholders as it reveals severe liquidity stress at MTNL, a government-owned telecom company. While the sovereign guarantee provides a safety net for bondholders, the inability to service even interest payments raises serious concerns about the company's financial health and may put further pressure on the already depressed stock price.