Reliance Communications gets revision in credit ratings

From Fitch Ratings

Reliance Communications announced that Fitch Ratings (Fitch), International rating agency, has revised Company's ) Long-Term Foreign, Local Currency Issuer Default Ratings and Senior Secured Notes (Notes) ratings from 'BB-' to 'B+'. Fitch has also placed on Rating Watch Negative and assigned a Recovery Rating of 'RR4' to the Notes.

Fitch has stated that the demerger of the wireless business and sale of the Infratel stake, if completed, will leave Company's debt servicing dependent on cash flow from its business-to-business enterprise, optical fibre and pay-TV business.

Fitch estimate that the Company's pro forma (excluding GCX) net debt and EBITDA would be around USD1.5bn-1.6bn and USD240m-250m respectively in the financial year to end-March 2018 (FY18) after the wireless demerger and stake sale in Infratel.

Fitch has also acknowledged that the Company could raise further capital to pay down holding Company debt through the sale of its pay-TV business, dilution of some of its stake in GCX and selling surplus real estate.

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