Fitch says Reliance Communications defaulting on debt is a real possibility, puts it into lower junk rating

US-based credit agency Fitch Ratings downgraded billionaire Anil Ambani-owned telecom firm Reliance Communications further into junk territory on Thursday, becoming the latest credit agency to cast doubt on the Indian mobile phone operator's ability to meet its heavy debts.

Fitch cut Reliance's long-term foreign and local-currency ratings to "CCC" from "B-plus", and its $300 million (Rs 1,800 crore) 6.5 percent senior secured notes due 2020 to "CCC/RR4" from "B+/RR4." "RCom's rating downgrade reflects Fitch's belief that some kind of default is a real possibility," the ratings agency said in a statement.

The downgrade comes amid growing concern that Reliance Communications, also known as RCom, will struggle to pay its hefty debts. Moody's Investors Service and its Indian affiliate ICRA cut their ratings on Reliance Communications deeper into sub-investment territory earlier this week.

The company reported its first full-year loss last month as new entrant Reliance Jio, owned by elder brother Mukesh Ambani, added to the fierce competition in the telecom sector and triggered a price war.

"RCom has formally advised all its lenders that it will be making repayment of an aggregate amount of Rs 25,000 crore from the proceeds of these two transactions, on or before September 30, 2017," the company recently said in a statement. Its net debt stood at a whopping Rs 44,345.30 crore as on March 31.