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Telecom service provider Mahanagar Telephone Nigam Limited (MTNL) will not be allowed to shut down. The option of taking the company to the National Company Law Tribunal (NCLT) has also been rejected. CNBC-TV18 has received information about this from sources.
Sources said that MTNL approaching NCLT is not a good idea for this government stock. For now, MTNL plans to maintain the status quo. In the long term, MTNL will need to infuse Rs 8,000 crore in funds to keep the company afloat.
A committee of secretaries is monitoring the company's case and soon a revival plan will be prepared so that this government company, which is burdened with debt and is facing cash crunch, can be rescued.
MTNL recently defaulted on a bank loan of ₹31,944.51 crore. The government is also not in favour of haircuts for lenders with exposure to MTNL. This month itself, the country's largest bank, SBI, has downgraded MTNL's account and included it in NPA.
CNBC-TV18 had earlier said in a report that banks including SBI will downgrade MTNL's account in the September quarter. SBI's exposure to MTNL is ₹325.52 crore as of 30 September 2024, of which ₹281.62 crore is outstanding. SBI has demanded payment to regularize the account. On Monday, MTNL's stock was seen trading at ₹52.80 per share with a gain of 3.6%.
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