MTNL raises Rs 1,005 cr via sovereign guarantee bonds

Funds raised to be accounted in FY13

State-run telecom company MTNL has raised Rs 1,005 crore through bonds backed by sovereign guarantee from institutional investors.

"We have raised around Rs 1,005 crore through sovereign guarantee bonds from institutional investors. The funds raised will be accounted in financial year 2012-13," MTNL's Chairman and Managing Director AK Garg told PTI.

The company's board of directors at its meeting held on March 25 had approved the proposal for raising non- convertible debentures (in the form of bonds) worth Rs 3,000 crore for a period of 10 years guaranteed by the government.

MTNL expects to raise the balance funds in early April, Garg added. The PSU telecom major will use funds to repay high interest loans and capital expenditure.

The company reported finance costs worth Rs 301.74 crore on standalone basis in third quarter ended on December 31, 2012. The total finance costs (standalone) incurred by company in FY 2011-12 stood at Rs 949.15 crore.

MTNL had appointed Karvy Computer Share Private Ltd as the registrar and share transfer agent (RTA), SBI CAP Trustee Ltd as trustee, Care and Crisil as credit rating agencies to oversee transactions for the bonds.