State-run MTNL will seek shareholders approval for raising the borrowing limit to Rs 15,000 crore at its extraordinary general meeting on February 26.
MTNL, at present, can borrow up to Rs 9,000 crore from time to time at its discretion from banks, financial institutions, mutual funds, general public, including non-residents and from any other source, the company said in a regulatory filing.
Also Read: MTNL to cut debt via spectrum refund, asset monetization
The operator said as the government is considering refund of the amount paid by it for acquiring broadband wireless access (BWA) spectrum to the tune of Rs 4,534 crore and the same may be arranged in the shape of sovereign guaranteed bonds with the total liability of payment of principle and interest on the government.
"... MTNL requires the approval of shareholders in this regard to raise the limit of borrowing from earlier Rs 9,000 crore to Rs 15,000 crore in order to meet the above process," the filing added.
The telecom operator said since its present long-term borrowings as on December 31, 2013 are Rs 5,220 crore with additional issue of Rs 2,980 crore on non convertible bonds in the nature of debentures in 2013, the total borrowings would be to the tune of Rs 8,200 crore.
"As such, the shareholders may concur to the proposal by way of special resolution as a one-time approval for raising the existing limit of Rs 9,000 crore to Rs 15,000 crore," it added.
A Group of Ministers (GoM) had decided to refund the money paid by both MTNL and BSNL for surrendering BWA spectrum. Both the state-run operators had requested the government to refund the amount they paid in 2010 for BWA spectrum, used to provide 4G data services.
MTNL's net loss widened to Rs 5,321.12 crore in the financial year 2012-13 from Rs 4,109.78 crore in FY12.
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