ALSO READMoody's, ICRA downgrade RCom over debt concerns Fitch downgrades RCom, says default a 'real possibility' Fitch downgrades RCom; says default a real possibility Reliance Communications says disagrees with new Moody's, Fitch ratings downgrades RCom shares dive over 4% on further downgrade in ratings
Reliance Communications Chairman Anil Ambani will not take any salary or commission in the current financial year as the company is reeling under huge debt and credit downgrades.
The top management of the company has also decided to defer their personal pay by 21 days till the end of this year.
"Chairman, Reliance Group, Anil D Ambani voluntarily decides to draw no salary or commission from RCom in current financial year," RCom said in a statement.
The company has defaulted on some of the payments to lenders and it has received time till December for strategic restructuring plan under which it will get a seven-month standstill to service loans amounting to Rs 45,000 crore.
RCom has been losing customers due to stiff competition in the market. The company has lost over 20 million mobile customers in about a year.
Rating firms Fitch, ICRA and Moody's have downgraded RCom's credit rating.
Fitch downgraded RCom to the lowest category with some hope for recovery of principal or interest amount while Moody's Investors Service downgraded the firm to the second lowest category.
Moody's downgraded RCom corporate family rating and senior secured bond rating to Ca from Caa1 with negative outlook.
Credit rating indicates capability of a company to pay back debt. Moody's rate firms in nine categories ranging from Aaa to C.
Ca rating indicates that obligations in this category are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
RCom has rejected credit rating cuts by Moody's and Fitch as the agencies' views apply only on its USD 300 million bonds, which are being serviced regularly and account for only 4 per cent of total debt the company has.
Ambani has said that the debt burden will be reduced to Rs 20,000 crore with two deals by September, before the December deadline given by the lenders.
RCom said Aircel and Brookfield deals are targeted to close by September 30, 2017 subject to approvals and will reduce debt by nearly 60 per cent or about Rs 25,000 crore.
The company has been reeling under a slew of rating downgrades over the last few days, battering its stock.
Shares of RCom closed at Rs 18.3 a unit, up by 1.39 per cent compared to previous close, at BSE today.
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