Reliance Communications (RCOM) on Wednesday disagreed with rating actions by credit rating agencies Moody’s and Fitch. “In May 2015, RCOM issued 6.5 per cent coupon bearing USD bonds, maturing in November 2020, for an aggregate amount of USD 300 million. These bonds constitute ~4 per cent of the total debt of the company. “The bonds have always been serviced regularly on the due dates and are fully current in servicing, as on date. The company had stated, vide its notice to Stock Exchanges dated 24 May 2017, that the company will continue to pay interest on the respective due dates, and the bonds will be repaid on the due date of November 6, 2020,” an official statement by the company said. “The ratings by Moody’s and Fitch apply only to these USD bonds. We respectfully disagree with the recent rating actions by both these agencies, and believe that these rating actions do not reflect the servicing track record of the company,” it added.
The statement said the rating agencies have not given due credit to the advanced stage of the corporate transactions (Aircel merger and Tower sale) which are expected to deleverage the company’s balance sheet by around $4 billion, that is, by 60 per cent within the next few months. “It appears that the recent positive development of the standstill period agreed by our lenders has been viewed negatively by the Rating Agencies on certain technical grounds, while in actual fact the same directly addresses their key concerns about the short term liquidity situation,” the company said.
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“It may also be noted that in the year 2012, the company had redeemed its Foreign Currency Convertible Bonds aggregating $1 billion on the specified due date on maturity, at full redemption value, without a day’s delay, despite severe volatility in global markets at that time,” it added.