Mahanagar Telephone Nigam Ltd (MTNL) has been classified as a non-performing asset (NPA) by the State Bank of India (SBI) because of the non-payment of dues worth ₹325.52 crore that include both principal and interest.
This was disclosed by the state-owned telecom firm in a regulatory filing to the stock exchanges.
An SBI letter to MTNL said that instalment and interest payment in the term loan account had become overdue as on September 30, 2024 because of the non-payment of the amount which was due as on June 30, 2024.
An account is classified as an NPA if the interest or principal remain unpaid for a period of 90 days. The MTNL account became an NPA with effect from September 28, 2024.
“The total outstanding in the account is ₹325,52,82,396.20 as on September 30, 2024. The total amount which is overdue as on September 30, 2024 is ₹281,62,37,053.45. In order to regularise the account, this amount is due with immediate effect and to be paid immediately. Your attention is also drawn to the term that in case the overdue(s) are not so liquidated, a penal rate of interest is chargeable on such outstanding,’’ the SBI letter said.
The public sector bank also sought the status of the government assurance to clear MTNL dues.
SBI has also required details of various monetisation projects on which MTNL is working, including its agreement with NBCC to develop 13.88 acres of land in the national capital into a residential and commercial space.
SBI added that it will be forced to take legal action against the telco if the scheduled payments are not made.
“...the bank will be constrained to institute legal proceedings for the recovery of the said entire loan, along with interest and take such other steps as may be available to the bank, including enforcement of securities without any further reference to you (MTNL) in the matter and entirely at your costs and consequences,” SBI said.
The development led to the shares of MTNL hitting the 5 per cent lower circuit on the bourses on Monday. It settled at ₹52.14, a drop of ₹2.74 over the last close.
Other banks have also moved against MTNL for the non-payment of dues. These include Punjab National Bank and Union Bank of India.
The latter froze all accounts of MTNL for the non-payment of dues.
MTNL has total borrowings of ₹7,873.52 crore from banks and financial institutions, and the total debt of the company stands at ₹31,944.51 crore.
MTNL has sought ₹1,151.65 crore from the government for the payment of interest arising out of sovereign guarantee bonds in the current fiscal.
Separately, the government, in the budget, allocated ₹3,668.97 crore for the payment of the principal amount of MTNL bonds.
