Fitch affirms RCom long-term foreign, local currency ratings at BB-

By March 4th, 2016 AT 3:41 PM

Rating agency Fitch affirmed Reliance Communications’ long-term foreign-and local-currency issuer default ratings (lIDR) of ‘BB-‘, indicating a stable outlook. It simultaneously affirmed the ‘BB-‘ rating on the Anil Ambani-led telco’s $300 million 6.5% senior secured notes due 2020.

mobile-india-airtel

The affirmation factors in RCom’s commitment to deleverage in a timely manner by using the proceeds from the sale of its tower business by its subsidiary, Reliance Infratel, Fitch said, added that the RCom management has committed to repay a part of its $6.1bn of debt and to achieve a target debt/EBITDA of below 3.0x by end-March 2017.

“We would likely downgrade the rating if the company is unable to demonstrate in a timely manner that it has the ability to pay down debt such that FFO-adjusted net leverage will fall to below 4.5x,” the ratings firm said.

The firm said that the asset sale will support its rating. Rcom has a non-binding arrangement to sell Infratel’s tower business to Tillman Global Holdings, LLC and TPG Asia, Inc.

“Should this transaction proceed and sale proceeds are used to pay down debt, Rcom’s FFO-adjusted net leverage could improve to below 4.0x as the indicative enterprise value will more than offset the additional lease-adjusted debt,” the firm said.

Apart from the sale of tower business, Rcom is also considering deleveraging via a sale of its non-core assets, including its under-sea cable subsidiary Global Cloud Xchange, real estate and its pay-TV business. However, progress on these asset sales has been slow to date. Rcom’s IDR is constrained by its weak market position as the fourth-largest telco in India with a revenue market share of around 8% and a subscriber base of mostly low-revenue customers.

Read more on:

Leave a Reply

avatar
Photo and Image Files
 
 
 

Recent Posts

d2h Magic Streaming Device Announced for D2h Set-Top Box Users, Available at an Introductory Price of Rs 399

d2h Magic is the new streaming device announced by Dish TV India for the D2h Set-Top Box users. The d2h...

Realme 5, 5 Pro Smartphones With Quad Cameras, Big Batteries Announced: Price and Specifications

Realme today announced the Realme 5 and Realme 5 Pro smartphones in India. The Realme 5 and 5 Pro both...

Nokia 105 Feature Phone With Long-Lasting Battery Life Announced in India for Rs 1,199

Nokia 105 is the latest feature phone from the house of HMD Global. The Nokia 105 was announced just a...