Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
21 January, 2018 11:58 IST
Fitch downgrades Reliance Communications to 'CCC'
Source: IRIS | 02 Jun, 2017, 09.12AM
Comments  |  Post Comment

Fitch Ratings has downgraded India-based Reliance Communications (Rcom) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to 'CCC' from 'B+'.

Fitch has also downgraded the rating on Rcom's USD 300 million 6.5% senior secured notes due 2020 to 'CCC/RR4' from 'B+/RR4'. The Rating Watch Negative on the IDRs and notes, which has been in place since December 2016, has been removed.

Rcom's rating downgrade reflects Fitch's belief that some kind of default is a real possibility. EBITDA declined by 30% to Rs 49 billion in the financial year to end-March 2017 (FY17) from Rs 71 billion in FY16, and is likely to be insufficient in the current financial year to meet annual interest costs of Rs 35 billion and maintenance capex of INR15 billion. At end-March 2017, liquidity was poor with cash and equivalents of Rs 14 billion-insufficient to pay short-term debt of Rs 109 billion.

We believe that Rcom may struggle to refinance its maturing short-term debt given declining EBITDA and delays in executing asset sales. Rcom's capital structure is unsustainable as FY17 FFO-adjusted net leverage was over 9.0x and we do not expect that operating cash flows will improve.

Shares of the company declined Rs 0.05, or 0.24%, to trade at Rs 20.70. The total volume of shares traded was 0 at the BSE (9.01 a.m., Friday).



Reliance Communications Limited   (Q,N,C,F)*

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Related Articles
Reliance Q3 profit up 25.5%; GRM at USD 11.6/bbl - 19-Jan-2018 18:34
HDFC Bank Q3 net grows 20% to Rs 41.51 bn - 19-Jan-2018 18:07
Wipro Q3 earnings fall 12% q-o-q to Rs 19.3 bn - 19-Jan-2018 17:56
Lupin launches generic Vibra-Tabs tablet in US - 19-Jan-2018 15:56
HCL Tech Q3 profit jumps 6% to Rs 21.94 bn - 19-Jan-2018 11:45
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer