The government has decided to honour the guarantee it extended on bonds floated by HMT and Instrumentation India by immediately releasing Rs 25 crore.While the liability of HMT is Rs 22 crore, Instrumentation will need Rs 3 crore to honour its commitments.Top officials say if the companies had informed in advance about the approaching liability and their inability to honour them, the government would have stepped in and such a situation would not have arisen.The ministry of heavy industry, under which both companies function, has sought finance ministry's concurrence to releasing the amount. The north block's approval is expected shortly.The two government-owned companies missed interest payment due in December last year on the bonds guaranteed by the central government.The default prompted rating agency S&P to issue a statement that said: "Missed payments on bond issues have become the direct obligation of the government, and hence progress in fulfilling these obligations has potential implications for sovereign's credit rating."
