MTNL to raise Rs 30 billion through sovereign guarantee bonds

Mahanagar Telephone Nigam Limited (MTNL) is planning to raise Rs 30 billion through sovereign guarantee bonds.

In a statement filed with the Bombay Stock Exchange, MTNL stated that the Ministry of Finance and the Department of Economic Affairs (Budget Division) has allowed the operator to raise and utilise funds worth Rs 30 billion in the financial year 2012-13.

It is proposed that the operator will raise 10 year bonds through private placement with bullet repayment on principal and interest at the end of 10 years. The bonds are guaranteed by the government and the base size of the issue is Rs 10 billion.

Further, the amount raised through the sovereign guarantee bonds will be used by MTNL to reduce its interest burden and will be utilised for capital expenditure