MTNL shares soar ~8% as board approves revival plan

19 Aug 2022 , 12:12 PM

Mahanagar Telephone Nigam Limited (MTNL) surged nearly 8% so far in today’s trade as the ailing telecom operator made multiple announcements following its board meeting.

At around 11.43 AM, MTNL’s counter was trading at Rs25.85, up by 8.39% against the previous close of Rs23.85 on NSE.

MTNL’s board conducted a meeting on August 12 and approved the termination of the depository agreement with the bank of New York Mellon (BNYM) and delisting of the company’s American Depository Shares listed in New York, with effect from October 1, 2022.

As per the approval by the cabinet for the debt-ridden PSU’s revival plan, the board also considered and approved the issue of sovereign guarantee bonds worth Rs17,571 crore. The board also suggested the merger of Bharat Broadband Network with MTNL.

The company also gave its acceptance to increase the board’s borrowing power from the existing Rs30,000 crore to Rs35,000 crore.

BSNL would offer all telecom services in Delhi and Mumbai via leasing of operational assets or other relevant models, while MTNL will monetize its land assets in order to decrease its debt and other obligations, stated the company in its regulatory filing.

MTNL shares have dropped roughly 25% so far in 2022, while the state-run telecom company witnessed an upside of 45% in the past year.

The government will extend one-time grant support of up to Rs1,600 crore for restructuring and operational integration of Telecom PSU.