In a recent communication, center clarified that they will no longer infuse any fresh capital into ailing Mahanagar Telephone Nigam (MTNL).
No Recharge For MTNL
Further revealing that the government may not initiate its closure right away, as this would be done only after the company clears its liabilities of around Rs 32,000 crore, according to official sources.
It appears that the company has been asked to generate revenues from asset monetisation and operations, and bring in efficiency to reduce costs in order to generate funds for expunging the liabilities, said the sources.
Little Prospect Of Revival
The government has clarified that the company will have to be wound up ultimately, most probably within a decade as it is having little prospect of the revival of MTNL.
Although, for doing so, all the liabilities need to be cleared and assets disposed of, the sources said.
Further adding that this was the reason for not closing it down straightway.
For the April-June quarter, MTNL’s net loss narrows to Rs 773.5 crore from Rs 783 crore in the previous quarter
The Central government owns a 56.25% stake in the state-run telecom operator presently which provides services in Delhi and Mumbai.
The remaining 43.75% is held by the public including 13.12% owned by Life Insurance Corporation of India (LIC).
Prior to this, The government had approved the first revival package for BSNL and MTNL during 2019.
After that a second revival package for BSNL/MTNL amounting to Rs 1.64 lakh crore was approved in 2022, where the share of MTNL is relatively less.
Recently, there was a speculative spike in MTNL’s share price in the hope of the company being delisted.
But, the stock started to recede when the government indicated that there is no such plan.
When it comes to the MTNL, it has varied liabilities that are to be met.
Also, the shareholders won’t get anything in case of a closure, said a senior official
Besides this, the company has defaulted on bank loan payments worth Rs 1,600 crore in the last six months.
MTNL has other liabilities including AGR and spectrum dues to the government.
