Fitch withdraws Reliance Communications’ ratings
Reliance Communication’s shares dropped by 7% after reports that a public relations firm had initiated insolvency proceedings against it surfaced.
Credit rating agency Fitch on Tuesday announced that it has withdrawn its ratings for the Anil Ambani-led Reliance Communications, citing commercial reasons. “Fitch will no longer provide ratings or analytical coverage for Rcom,” the statement issued by the Ratings firm said.
The shares of Reliance Communications dropped 7% on Tuesday after reports that a public relations firm had initiated insolvency proceedings over allegations of unpaid dues. The National Company Law Tribunal will hear the case on December 19.
Meanwhile, Reliance Communications said according to the guidelines, the company is under “standstill period till December 2018”. “The company has also announced various asset sales and a comprehensive debt resolution plan,” the company told stock exchanges. “Accordingly, for the time being, no payment of interest and/or principal is being made to any lenders and/or bondholders of the company.”
On November 28, the telecom group’s largest creditor, China Development Bank, had filed a case against it under the Insolvency and Bankruptcy Code. In September, Ericsson’s Indian subsidiary had filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues of Rs 1,150 crore. Karnataka-based Manipal Tech has also claimed dues of Rs 2.74 crore from the telecom company.