State-run Mahanagar Telephone Nigam (MTNL) is considering a bond issue for repaying a part of the Rs 7,500 crore debt it has taken to pay for 3G spectrum in Delhi and Mumbai.
"We took a debt of Rs 7,500 crore from Axis Bank, Central Bank of India and ICICI Bank, which are short-term loans for a period of 12 months. Spectrum projects are longer gestation projects... So we have to match it with long-term repayment schedule," MTNL Director (Finance) Anita Soni said here.
The entire debt will be covered through a mix of bonds and debts, she said, adding that the PSU could follow the private placement route.
"We will start the process in the next 3-4 weeks. Longer term debt is usually with more risks, so we will have to see at what rate we are able to firm it up," Soni said.
She said the company is in the process of raising long-term debt and bonds for the PSU's debt management programme.
"We are likely to come to the markets with bonds. We are already in touch with banks for longer term loans. To repay the 3G short-term loans, we will have a mix of both. We are in the process of engaging arrangers for the bonds, which will be finalised in 2-3 weeks. We will have the final structure of the bonds after consultation with the arrangers," Soni said.
MTNL is no stranger to the bond market. It has raised funds through these instruments several times in the past.
The PSU will also seek to get a credit rating from a reputed agency to facilitate access to loans from financial institutions, she said.
The other way of generating revenues, Soni said, is to monetise the real estate assets and the huge back-end infrastructure of MTNL. It has also issued an Expression of Interest to share 3G spectrum with other players for roaming in Delhi and Mumbai.
