State run BSNL plans to issue sovereign bonds for raising Rs 15,000 crore next month, its chairman and MD PK Purwar has said.
"We have written to DoT already asking for approval for the Rs 15,000 crore sovereign bonds. DoT is in the process of sending it to finance ministry for approval. We can raise all Rs 15,000 crore in one tranche. We expect to get the approval soon for the bonds to raise the funds", P K Purwar, CMD of BSNL told IANS.
Government bond or sovereign bond is a bond issued by a national government, generally with a promise to pay periodic interest payments called coupon payments and to repay the face value on maturity.
The package includes raising of Rs 15,000 crore sovereign bonds to meet the immediate capital requirement. BSNL is slated to start 4G services next year and before that it will have to take network upgrade, float a new 4G tender as well.
On November 1, state-run MTNL said it has received communications from the Government on the cabinet decision. As per this decision, MTNL will be a subsidiary of BSNL by transferring the government's shareholding to it following the Union Cabinet's in-principle approval to their merger. Government holds 56.25 per cent in MTNL. The cabinet decision last month had paved the way for MTNL to be a subsidiary of BSNL and the firms can raise Rs 15,000 crore on sovereign bonds.