 "CARE downgrades Aircel loans to 'default' grade")
CARE Ratings on Thursday downgraded ratings for Aircel’s long-term loans to “D”, default grade, from “BB+” on account of the delays in servicing debt obligations.
The company delayed interest repayments due to weak liquidity. The continuing weak operational performance in the hyper-competitive telecom sector led to weak liquidity conditions, CARE said.
The Indian telecom sector is witnessing intense competition with the entry of Reliance Industries-promoted Jio. The ratings are based on a consolidated view on the credit risk profiles of Aircel and its wholly-owned subsidiaries — Aircel Cellular, Dishnet Wireless and Aircel Smart Money — that operate under common management.
Aircel started its operations with the launch of services in the Chennai circle in 1995. Since then, it expanded to become a pan-India player. As of March 31, Aircel and its subsidiaries are present in 22 circles, with a total subscriber base of 90.9 million.
Going forward, the ability of the company to service its debt obligations timely and finalisation of its new business plan after discussions with the lenders would have a bearing on ratings.
Gross revenue of the telecom sector for the quarter ended March was moderated by around seven per cent growth on a year-on-year basis.
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