MTNL plans long-term debt mgmt

Saddled with loans of Rs 7,500 crore taken for buying 3G and broadband spectrum, state-owned MTNL today said it would repay most of the debt within six months to a year and then go for long-term debt management.

“There are various options to go for long-term debt management. First of all, we are going for credit rating of the PSU shortly,” Kuldeep Singh, chairman and managing director, told PTI.

The PSU had borrowed the Rs 7,500 crore in the last one month to pay the government for acquiring 3G and Broadband Wireless Access spectrum in the two metros of Delhi and Mumbai.

All finances were arranged through short-term loans and at a very competitive rate of interest ranging between 7.3 and 7.5 per cent annually, he said.

The PSU was looking to start various new services for generating additional revenues. Prior to this, the PSU was a debt-free company and also has cash reserves but those may be utilised for future expansion. Thus, it is looking at an option of partly repaying the debts and then going for long-term debts. It had raised funds from four banks — ICICI Bank, YES Bank, Axis bank and Central Bank of India.

MTNL operates in Delhi and Mumbai and was given 3G and BWA spectrum about a year ago on the condition that the PSU would pay as much as the final bid in the auction.