Reliance Capital is in the process of selling its holdings in several assets to raise funds including its entire stake in Reliance Nippon Life Asset Management Ltd., where it expects to realize a premium over the current market price of more than 50 billion rupees, according to the statement. The financial services firm is the last stronghold in embattled tycoon Anil Ambani’s phone carrier-to-power empire, which has been beset by financial woes that earlier this year threatened to land the businessman in jail.
“The company has been working diligently to ensure timely debt repayments and is regular in all its debt payments,” Reliance Capital said.
In downgrading its credit score, Care cited developments including defaults by subsidiaries Reliance Home Finance Ltd. and Reliance Commercial Finance Ltd., which would likely reduce the group’s financial flexibility and diminish Reliance Capital’s ability to raise funds from the market.
Reliance Capital’s “financial risk profile is characterized by depletion of liquidity, high dependence on planned disinvestments for debt servicing and delays in fructification of such disinvestments,” Care said in its statement. The rating company said it will closely monitor the asset-sale process and Reliance Capital’s ability to complete this in a timely manner, reduce debt and maintain liquidity would act as “key rating sensitivities.”