Economy

No impact of Aircel merger cancellation on RCom's rating: Moody's

No impact of Aircel merger cancellation on RCom's rating: Moody's”

Shares of Reliance Communications advanced in Wednesday's trade after its recent decision to call off the merger with Aircel.

"Reliance Communications Limited's (Rcom's) cancellation of the merger agreement of its mobile business with Aircel Limited has no impact on Rcom's Ca corporate family and senior secured bond ratings". "Legal and regulatory uncertainties, and various interventions by vested interests, have caused inordinate delays in receipt of relevant approvals for the proposed transaction", Prakash Shenoy, RCom secretary, said in a statement. Also, the merger would have eased the companies to pay down the combined debt that soared to about 600 billion rupees ($9.2 billion) as of the end of previous year. Speaking on the company's plans to raise funds to service the debt, Garg said that apart from selling the tower business, the company was also considering selling fibre optic, real estate and other assets, and would be able to raise 250 bln rupees, as stipulated earlier.

In a meeting with Board of Directors, RCom reviewed the ongoing strategic transformation programme, and considered alternate plans for debt reduction.

RCom also blamed high level of competition as one of the reasons for termination of the merger talks. As a result of the various factors aforesaid, the merger agreement has lapsed. On Sunday, RCom said both companies agreed to cancel the deal, which was slated to be completed this year. Foreign lenders too may have to take a Rs 6,000 crore haircut.

Following the downtrend in the stock, the market capitalisation of the company fell by Rs 523 crore to Rs 4,256.16 crore.

On the BSE, the stock hit a record low of Rs 16.75 during the day before closing at Rs 17.10, its lowest closing since the stock listed in July 2006, following the split of businesses between Mukesh Ambani and Anil Ambani. Shares of the company opened on a weak note at Rs 18.70 on the BSE, then lost further ground and fell to an intra-day low of Rs 16.75.



Like this

Latest


04 October 2017
Brazil robbers caught trying to tunnel into bank
In order to carry out the heist, those involved handed over thousands of pounds, raising a total of almost £1million for the job. The gang had spent over a million dollars in the construction of the tunnel, according to an investigator that spoke to RT.

04 October 2017
Tesco's turnaround continues as half-year profits surge despite inflation
It also coincides with the trial of three former Tesco execs who have been charged with fraud and false accounting . Tesco shares rose 2% at the open in London on the back of the numbers.

04 October 2017
This Weeks Target Prices For Cooper Tire & Rubber Company (NYSE:CTB)
Finally, Guggenheim started coverage on shares of The Goodyear Tire & Rubber in a research note on Wednesday, June 21st. Expectations are typically that future earnings will be higher, and thus the stock price is expected to rise as well.

04 October 2017
Scalise's support for gun rights 'fortified' by Vegas shooting
His return came just days before the worst mass shooting in modern US history at a country music festival in Las Vegas. He said it's one thing to push for reasonable gun control legislation, but it's another to "politicize a tragedy".

04 October 2017
Some automatic weapons are legal, albeit heavily regulated
Thirty-five people died in the massacre, a turning point for a nation that traditionally had a high rate of gun ownership. Since 1986, US gun-makers have been prohibited from manufacturing civilian guns capable of firing automatically.

04 October 2017
Bills WR Matthews to miss a month
Former Ohio State wide receiver Corey "Philly" Brown is signing with the Buffalo Bills , according to NFL .com's Ian Rapoport. Titans: Tennessee is adding Brandon Weeden as a third quarterback with Marcus Mariota recovering from a strained hamstring.

04 October 2017
Priests Scale Bali Volcano on the Verge of Erupting
These harmless living creatures are being relocated to temporary shelters where they are served proper food. Some forced to flee have carried their animals with them, fearful they will die or be stolen.

04 October 2017
National Night Out events taking place around Houston area
Taylor said National Night Out allows officers to build relationships with the community. Karl Ratcliff with the Lafayette Police Department said.

04 October 2017
I want different voices, not yes men, insists May amid Johnson controversy
Mr Johnson said the Labour leader was a "superannuated space cadet from Islington" and suggested he should be sent "into orbit". She was, however, in the audience for Chancellor Philip Hammond's speech yesterday and for Johnson's address previous year .

04 October 2017
Pentagon chief says USA should 'stay with' Iran nuclear deal
As a possible solution, officials said the administration is weighing whether to send the question of sanctions back to Congress. Mogherini said that issues outside the scope of the deal should be "tackled in different formats, in different fora".



Recommended