The Indian government plans to revive the ailing Mahanagar Telephone Nigam Ltd. and rules out any bankruptcy or merger arrangement, according to people aware of the development.
The government is working on a bailout package for the wholly owned subsidiary of Bharat Sanchar Nigam Ltd., sources from the finance ministry told NDTV Profit on the condition of anonymity. They said they will work out the restructuring loan conditions to pay back bank loans.
The telecom company defaulted on bank loan payments, and total debt obligations stand at Rs 27,740 crore. The total exposure stands at Rs 8,000 crore.
The State Bank of India on Friday classified a term loan in the non-performing asset-substandard category due to non-payment of interest and instalments.
The lender asked the struggling telco to make the scheduled payments immediately, to upgrade the account, failing which it threatened to institute legal proceedings for the recovery of the entire loan along with interest.
MTNL has been asked to submit details of land assets and issues with the monetisation, sources said, adding that it was asked to cut operational costs and share resources with BSNL.
(This is a developing story.)
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