Moody's said the negative outlook reflects its view that ongoing delays in RCom's rollout of the deleveraging plans will keep the operator's financial and credit profile strained over the near term.
"The change in outlook to negative from stable reflects persistent delays in the company's sale of non-core assets, which underpins its deleveraging strategy. As such, there is unlikely to be material improvement in leverage as well as associated liquidity and refinancing pressures over the next 6-9 months, even if the company announces a binding tower sale transaction this quarter," says Nidhi Dhruv, Moody's Vice-President and Senior Analyst.
The ratings agency said that upon completion of the share swap transaction with Sistema Shyam Teleservices (SSTL), RCom will have adequate spectrum.
However, should the company participate in the upcoming spectrum auction, its leverage metrics will be further pressured.
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"RCom continues to have a strained liquidity profile... There is also an ongoing need to refinance upcoming debt maturities, including USD 450 million in debt falling due in the quarter ending June 30, 2016," Dhruv added.
The agency said RCom is pursuing restructuring of its wireless activities. In December 2015, the company announced that it had entered into exclusive discussions with Aircel for a potential combination of businesses.
"This deal is yet to close and on March 23, 2016, the company announced that it had extended the exclusivity period by 60 days to May 2016," it said.