New Delhi: State-run MTNL has invited expression of interest (EoI) from banks for providing long-term loans of Rs1,500 crore to repay its debts and meet operational expenses.
“The loss-making PSU has called for an EoI from public/private banks for providing an offer for long-term loans (secured) of Rs1,500 crore with a floating interest rate for a tenure of seven years,” MTNL said in a statement.
The loan will be raised in tranches as per the requirement within the discretion of the MTNL without any penalty and interest to be calculated for such tranches from the date of raised, it added.
“... floating interest rate for a tenure of seven years with a moratorium period of 3 years on principal repayment with interest payment on monthly basis followed by repayment of loan quarterly in the ballooning pattern,” the company said.
The opening date of sale of tender document is from 4 July and the closing date and time of sale of tender document is 11 July 2011.
“MTNL has full right to make prepayment in advance without any penalty even during the moratorium period,” the statement added.
The loan might be used to repay the loan MTNL had taken for buying 3G and BWA spectrum last year.
The company is already in the process to restructure its loan worth Rs7,000 crore taken for buying 3G and BWA spectrum last year. The PSU is planning to convert Rs3,000 crore loan into long-term debt.
MTNL, which operates in two metros - Delhi and Mumbai - had raised a short-term debt of over Rs7,000 crore for acquiring 3G and broadband spectrum.
The company had already restructured Rs3,500 crore of debt, repaying Rs500 crore and tying up with two state-run banks for the rest Rs3,000 crore.
Delhi and Mumbai were the most expensive circles for 3G with the bid for Delhi costing Rs3,316.93 crore and Mumbai Rs3,247.07 crore against the reserve price of Rs320 crore each for both the metros.
Similarly for BWA, Delhi and Mumbai saw the highest bids at Rs2,241.02 crore and Rs2,292.95 crore, respectively. MTNL has already launched 3G mobile services.
For FY11, the telecom major had reported a yearly net loss of Rs2,826 crore, up 8.27% from Rs2,610.9 crore in the same period previous year.
Total income rose to Rs3,841.2 crore as against Rs3,781 during the period under consideration.