Moody’s downgrades Reliance

Moody's Investors Service said it downgraded Reliance Communications Ltd.'s corporate family rating and senior secured bond rating to B2 from B1.

The outlook is negative.

This concludes a review that began in November, Moody’s said.

The downgrades primarily reflect an expectation that the company’s consolidated debt-to-EBITDA ratio will remain higher than 7x over the next six- to nine-months while the company pursues regulatory, shareholder and debt holder approvals for its announced restructuring, the agency said.

The company is expected to pursue the de-merger of its wireless business and sale of its tower assets as part of the restructuring, Moody's said.

The agency also said it believes the company’s EBITDA for its Indian operations, which contribute about 85% of EBITDA, will remain under pressure over the next six- to 12-months in light of intensifying competition in India's mobile sector.

The company’s liquidity position also remains weak, Moody’s said.

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