Brickwork downgrades Reliance Capital's rating to BWR BB

The credit rating agency said action is primarily due to revision in timelines for divestments and deterioration in the standalone financial performance of the company due to impairment of assets.
For representational purposes.
For representational purposes.

MUMBAI: Brickwork has downgraded Reliance Capital's rating to BWR BB with negative implications for its long-term debt programme, market-linked debentures and subordinated debt.

Brickwork said the action is primarily due to revision in timelines for divestments and deterioration in the standalone financial performance of the company due to impairment of assets.

"The company has been working diligently to ensure timely debt repayments," said Anil Ambani-led Reliance Capital in a statement late on Monday after market closing hours.

"As publicly informed, the company is in the process of monetising its entire stake in Reliance Nippon Life Asset Management Ltd (RNLAM) for Rs 6,000 crore. The company has already realised Rs 1,450 crore through an offer for sale by selling 10.75 per cent shareholding in RNLAM."

The company has also announced its plans to monetise 49 per cent stake in Reliance General Insurance Company Ltd which is presently 100 per cent owned.

The draft red herring prospectus (DHRP) has recently been filed with the Securities and Exchange Board of India (SEBI). The company's asset monetisation plan is on track.

"The company expects to realise proceeds of over Rs 10,000 crore and sharply cut its overall debt by more than 50 per cent within the current financial year," said Reliance Capital in the statement adding that Brickwork did not fully factor in the impact of its massive debt reduction and value unlocking plan.

Reliance Capital, a part of the Reliance Group, is one of India's leading private sector financial services companies with interests in asset management and mutual funds; life, health and general insurance; commercial and home finance; stockbroking; wealth management services; distribution of financial products; asset reconstruction; proprietary investments and other activities in financial services.

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