India's Mahanagar Telephone Nigam surges after report on govt's revival plan

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BENGALURU (Reuters) - Shares of India's state-owned loss-making telecom firm Mahanagar Telephone Nigam Ltd soared as much as 15% on Thursday, after a media report that the government has a revival plan in place.

India has drawn up a package worth nearly 1.3 trillion rupees ($17.54 billion) to revive state-run telecom companies Mahanagar Telephone Nigam and Bharat Sanchar Nigam Ltd, according to news agency NewsRise.

The proposed details are expected to be floated in the cabinet next month, the agency reported, citing a senior government official aware of the development.

"The cash component in package would be 250 billion rupees-to-300 billion rupees", the news agency reported citing the official, adding that there would also be issuance of preferential shares to the government.

The development comes after the government deferred, earlier this year, the merger of the two state-owned companies due to financial reasons, according to local media reports.

The remainder of the package would be split into about 500 billion rupees of spectrum payment dues and 360 billion rupees of pending adjusted gross revenue payments, according to the NewsRise report.

The company, set up in 1986 by the Indian government, posted a loss of 6.53 billion rupees for the quarter ended Sept. 30, up from 5.83 billion rupees a year ago.

MTNL's shares rose 15% to 20.70 rupees in their biggest intraday rise since March 10 and have so far gained 30.4% this year.

The company's total debt stood at 256.15 billion rupees ($3.46 billion), at the end of financial year March 31, 2021.

($1 = 74.1100 Indian rupees)

(Reporting by Rama Venkat in Bengaluru; Editing by Shailesh Kuber)

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