BSNL will be issuing sovereign guarantee bonds in the next 10 to 15 days to restructure its debt along with the debt of State-run MTNL.
While the exact amount of sovereign bonds to be released is still being decided by the officials, the Centre had provided the PSU a ₹19,000 crore guarantee in September for debt restructuring purposes. Sources confirmed with businessline that the bonds will be released in the coming weeks and will be sold through an e-bidding exercise on the BSE.
BSNL will make an official announcement in the next few days, said the source.
Both telcos have a combined debt of around ₹60,000 crore, of which ₹33,000 crore is on the books of BSNL as per certain reports. The telcos met bankers and investors on Tuesday.
The last time MTNL tapped the bond market was in October-December 2020, when it raised an aggregate of around 65 billion rupees through two 10-year government-guaranteed bond issuances at a semi-annual coupon of 6.85 per cent and 7.05 per cent.
Revival package
MTNL and BSNL plan to raise ₹10,910 crore and ₹8,446 crore respectively by issuing sovereign guarantee bonds.
They are looking to issue bonds maturing in 10 years and will pay a semi-annual coupon, similar to how Central government bonds are priced.
The ₹19,000 sovereign guarantee is part of the Centre’s revival package in July this year. As per the package, the government will provide a sovereign guarantee to these PSUs for raising long-term loans. They will be able to raise long-term bonds for an amount of ₹40,399 crore.
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Published on November 1, 2022
