Mahanagar Telephone Nigam limited (MTNL) is planning to restructure the Rs 70 billion loan it took for purchasing 3G and BWA spectrum in 2010. The company is planning to convert the Rs 30 billion loan into long term debt.
The company has already restructured Rs 35 billion of debt, repaying Rs 5 billion and tying up with two state-run banks for the rest of the Rs 30 billion. It is believed that the company is expected to convert this short-term loan into a long-term debt for seven years and is likely to complete this process by July 2011.
Also, it is believed that the company will pay the interest for the first three years and then will pay the principle amount and the interest for the remaining four years.
These finances were arranged through short-term loans and at a rate of interest ranging between 7.3 and 7.5 per cent annually. Prior to this, the company was debt-free company and also had cash reserves.
