Reliance Communications shares tumble 3% after rating downgrades

Shares in Reliance Communications fell in early trade on Wednesday after credit rating agencies Moody's and Fitch downgraded the company's ratings.

At 11:15 am, the stock was trading 3 percent lower at Rs 19.50 on the BSE.

Moody's revised RCom's ratings from 'Caa1' to 'Ca' with a negative outlook.

Further, Fitch Ratings has changed the company's long-term foreign and local-currency issuer default ratings to 'RD' from 'CCC' and revised the bond rating to 'C/RR4' from ' CCC/RR4'.

The ratings come after Reliance Communications announced the bank lenders are prepared to waive debt service obligations until end of 2017 to provide time for the company to lower its debt through two proposed transactions and present a plan demonstrating how the debt can be serviced over the long term, according to a BSE filing.

The company also added that after it sealed the deal for the Aircel and Brookfield transactions, it has formally advised all its lenders that it will be making repayment of Rs 25,000 crore from the proceeds of these two transactions, on or before 30th September, 2017.

"The said amount will cover not only all scheduled repayments, but also include substantial pre-payments to all lenders on a pro-rata basis," the company said.

Shares in the company were at Rs 19.70 in pre-open trade versus their previous close of Rs 20.15 rupees on Tuesday.