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
27 May, 2018 15:04 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
Sun Pharmaceutical Industries quarterly earnings up 7% - 25-May-2018 16:12
Tech Mahindra quarterly profit zooms 2.09 times to Rs 12.31 bn - 25-May-2018 16:02
Lupin submits MAA for Etanercept Biosimilar in Europe - 25-May-2018 12:35
HDFC Sec maintains 'Buy' on Granules India - 25-May-2018 11:37
Zydus Cadila gets USFDA nod for Dutasteride, Tamsulosin HCl capsules - 25-May-2018 11:05
Pidilite Industries quarterly earnings surge 57.43% - 25-May-2018 10:34
United Breweries quarterly earnings soar 13.51 times - 25-May-2018 10:23
Larsen & Tubro bags order worth Rs 31.91 bn - 25-May-2018 09:57
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