MUMBAI: International ratings firms Moody’s and Fitch on Tuesday downgraded Reliance Communications for a second time in the span of a week, even as the telecom firm received a seven-month respite from bankers on repayment of debt.
Moody’s Investors Service cut its rating to Ca from Caa1. The new rating suggests that the debt is highly speculative and likely in, or very near, default, with some prospect of recovery of principal and interest. It had downgraded RCom to Caa1, indicating high risk, on May 30.
Fitch Ratings lowered RCom’s rating to RD from CCC, saying the situation constituted restricted default, as multiple waivers or forbearance periods have been extended in parallel following a non-payment event. Fitch last cut RCom’s rating on June 2.
A Moody’s statement said the telco’s operations will remain under significant pressure, even as EBITDA continues to contract and it continues to consume cash over the next several months.