Government-run Mahanagar Telephone Nigam Ltd. said it is unable to pay semi-annual interest to a bondholder due to lack of sufficient funds. As per a tripartite agreement signed with the Department of Telecommunication, Ministry of Communications and Beacon Trusteeship Ltd., dues had to be paid 10 days before the due date of July 20.
The second semi-annual interest payment was to be credited in an escrow account, according to an exchange filing.
India Ratings said MTNL bondholders will invoke sovereign guarantee if they are not paid by July 12. They will invoke the said guarantee by sending a notice to the government.
As per the payment structure mechanism, the government shall deposit requisite funds in the designated trust and retention account, as per the notice of invocation served by the trustees latest within three days of the notice, India Ratings said.
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