BWA payment: MTNL to borrow Rs 4000 cr

NEW DELHI, INDIA: State-run telecom player Mahanagar Telephone Nigam Limited (MTNL) has come up with the expression of interest seeking a loan of Rs 4000 crore to pay for the BWA spectrum.

The EOI put up by the company mentioned that company seeks loan amount of Rs 4000 crore for period of one, two and three years for payment of BWA spectrum price, with an option to repay them before maturity without any penalty.

BWA auctions are currently going on and the price for the pan-India spectrum has reached Rs 11517.85 crore at the end of 13 days of bidding. MTNL will have to pay for only two metro circles, Mumbai and Delhi, where the company has its operations.

The payment to be made by the company has to match the highest price to be paid by the winner of the bid in those circles. At the end of 102nd round of auction, BWA prices in these two circles reached Rs 3935.2 crore and is expected to cross Rs 4000 crore by the end of this evening.

MTNL had a reserve of Rs 5000 crore approximately before paying Rs 6564 crore for 3G spectrum. The company has already taken a loan of Rs 2500 crore from Axis Bank to pay for the 3G spectrum.

In case the company has exhausted the reserve and loan amount raised by Axis bank, it is left only with Rs 936 crore. After raising loan of Rs 4000 crore, the company will have total amount of Rs 4936 crore for BWA spectrum payment.

When contacted by CyberMedia News Anita Soni, director (Finance), MTNL, mentioned that the company will ensure that it has enough funds and call will be taken after BWA prices are finalized.

“The expression of interest has asked individual banks to send their quotations. There will be no change in expression of interest. We have to ensure that we are in a position to manage sufficient funds and that we will do. The BWA spectrum price is not yet final. We will take final call based on the final price of spectrum,” said Soni.