New Delhi: State-owned telecom operator Mahanagar Telephone Nigam Limited (MTNL) has informed stock exchanges that it has failed to fund the escrow account for the upcoming 6th semi-annual interest payment on its 7.78% Bond Series VIIC, citing insufficient funds.
In a regulatory filing under SEBI Regulation 30, MTNL said the interest payment on the bonds (ISIN: INE153A08121) is due on February 10, 2026. As per the structured payment mechanism under the tripartite agreement (TPA) signed with the Department of Telecommunications (DoT) and Beacon Trusteeship Limited, MTNL is required to deposit the interest amount into an escrow account maintained with Bank of India at least 10 days before the due date.
However, the company disclosed that it was unable to deposit the required funds into the escrow account due to a shortage of cash.
Importantly, MTNL clarified that the bonds are sovereign guaranteed by the Government of India. In the event of any default in payment of principal or interest, the debenture trustee is empowered to invoke the sovereign guarantee, obligating the Government of India to make good the payment, as per the terms of the tripartite agreement filed at the time of bond listing.
The disclosure once again highlights MTNL’s strained financial position, even as bondholders remain protected through explicit government backing.