Reliance Communications (RComm) is in focus because the 2020 bond is down in Hong Kong trade; in fact, it lost around 33 percent this week. CARE Ratings had downgraded the stock earlier this week.
In an interview to CNBC-TV18, Revati Kasture, Senior Director of CARE Ratings shared her thoughts in terms of what is happening with RComm's bond trade.
Below is the verbatim transcript of the interview.
Ekta: What is your sense in terms of the Reliance Communications' 2020 bond which is now down around 17 percent odd and whether you had a chat with the management to have some clarification on the same?
A: Not really had a chat with the management to have clarification on this particular bond price crash. However, the credit profile of the company is what the bond investors also would be worried about because there is a definite stress on the credit profile and the debt coverage indicators per se.
It is more of an industry issue where all the companies in the industry have been affected by entry of Reliance Jio and the resultant price war per se where they had to completely reprise the services. As a result most of them have reported lower numbers; RComm has reported a loss in the nine-month FY17 numbers and the debt repayments for this particular year which are getting due is something which relies a lot of refinancing per se. So that may be worrying.
Ekta: A follow-up which I wanted to ask you - we understand that this is 300 million bond which is trading and the coupon payment of 6.5 percent was suppose to be half yearly. So the last payment which was actually due was on May 7. Has the company paid the latest coupon? Has there been possibly a miss in terms of the date and extension, anything that you would know about?
A: When we interacted with the company, they said they were regular in all the payments.
Ekta: When was that?
A: This was before the downgrade. So around May 15.
Watch accompanying video of CNBC-TV18's Varinder Bansal for more details.
Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.
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