Mahanagar Telephone Nigam Limited (MTNL), a government-owned telecommunications service provider, has successfully funded the required semi-annual interest payment for its 6.85% Bond Series VI (INE153A08097) after initially reporting funding difficulties. The company completed the funding of its designated escrow account on December 18, 2025, ensuring timely payment to bondholders.

Bond Payment Resolution

Initial Funding Challenge

MTNL had previously reported on December 11, 2025, its inability to fund the required semi-annual interest payment due to insufficient funds. The company operates under a comprehensive Tri-Partite Agreement (TPA) framework that requires funding the escrow account maintained with Bank of India at least 10 days before the payment due date.

Sovereign Guarantee Framework

All bonds issued by MTNL carry sovereign guarantee from the Government of India, providing crucial protection for bondholders. Under this arrangement, if MTNL defaults on principal or interest payments, the debenture trustee can invoke the sovereign guarantee, obligating the Government of India to make the payment to MTNL.

Official Update

In its latest regulatory filing dated December 18, 2025, MTNL informed the stock exchanges: "The funding of Designated ESCROW Account maintained in Bank of India for payment of the 10th Semi Annual Interest w.r.t. 6.85% MTNL Bond Series VI (INE153A08097) which is due on 21st December 2025, has been done on 18th December 2025."

Financial Implications

The successful resolution of this funding challenge demonstrates MTNL's ability to meet its debt service obligations, albeit with initial difficulties. While the company managed to fund the escrow account before the due date, the initial funding concerns highlight ongoing financial constraints. The sovereign guarantee framework continues to provide essential backup protection for bondholders, ensuring payment security despite operational cash flow challenges in the competitive telecommunications sector.

Mahanagar Telephone Nigam Limited (MTNL), a government-owned telecommunications service provider, has taken proactive steps to ensure timely payment of interest on its bonds. The company recently announced that it has successfully funded the designated escrow account for its upcoming semi-annual interest payment.

Key Details of the Bond Interest Payment

Significance of the Announcement

This move by MTNL demonstrates the company's commitment to meeting its financial obligations on time. By funding the escrow account three days prior to the due date, MTNL ensures that bondholders will receive their interest payments as scheduled.

Regulatory Compliance

In line with transparency requirements, MTNL has duly informed both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) about this funding arrangement. This disclosure complies with Regulation 30 of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements (LODR), 2015.

Company's Communication

According to the official communication from MTNL:

"Further to our letter of even no dated 04.11.2025, we would like to inform you that the funding of Designated ESCROW Account maintained in Bank of India for payment of 06th Semi Annual Interest w.r.t. 8.00 % MTNL Bond Series VII A (INE153A08105) which is due on 15th November 2025 has been done on 12th November 2025."

This statement, signed by Ratan Mani Sumit, the Company Secretary of MTNL, confirms the timely funding of the escrow account.

For investors and stakeholders, this announcement provides assurance about MTNL's financial management and its ability to meet debt obligations. It also reflects the company's adherence to regulatory requirements and commitment to transparent communication with the market.