Mahanagar Telephone Nigam Limited — Important, 22-11-2024: Updates

MTNL has communicated that it is unable to fund the 04th semi-annual interest payment for its 7.87% Bond Series VII-B due on December 1, 2024, due to insufficient funds. As per the Structured Payment Mechanism outlined in the Tripartite Agreement, MTNL was required to deposit the necessary amount into the ESCROW Account 10 days prior to the payment date. While all MTNL bonds are backed by a sovereign guarantee from the Government of India, any default on interest or principal payments will result in the invocation of this guarantee by the Debenture Trustee, obligating the government to settle the payment. This situation raises concerns regarding MTNL's liquidity and financial position, signaling a need for investors to closely monitor the company's cash flow and funding capabilities.