Reliance Communications Ltd.’s lenders have agreed to a seven-month moratorium on the debt payments of Indian billionaire Anil Ambani’s wireless business, which had its credit rating slashed in the past month, Bloomberg News reported. Creditors have given Reliance Communications, or Rcom, time until December to sell its towers to Canadian asset manager Brookfield Infrastructure Group and merge the wireless business with Aircel Ltd., Chairman Ambani said at a press conference in Mumbai on Friday. These transactions will help the company reduce debt by 60 percent, he said.

Shares in Reliance Communications are down again in the wake of the telco’s credit rating being downgraded. On Tuesday, Moody’s Investors Services cut RCom’s corporate rating to Caa1, indicating high credit risk, the Financial Times reported. That followed a move by Care Ratings, India’s second-largest rating agency, cutting all types of the company’s debt to “default”, the lowest level. The downgrades come hot on the heels of a media report that RCom had missed interest repayments to more than 10 Indian banks.

Brutal competition and 457 billion rupees ($7 billion) of borrowings have finally caught up with billionaire Anil Ambani’s Reliance Communications Ltd. The Indian wireless operator rattled investors with its first full-year net loss amid signs it’s struggling to repay debt, Bloomberg News reported. Its $300 million junk-rated note due in 2020 declined as much as 13.9 cents on the dollar to 70.1 cents on Monday and the stock sank to a record low.

In India, the vultures are circling. These vultures are investors looking for opportunities in distressed assets and bad debts. For years they had avoided investing in India, put off by a creakingly slow legal system and a labyrinthine bureaucracy. But a new bankruptcy law and a move this month to give India’s central bank expansive powers to tackle bad debt have excited investors both here and abroad who think investing in India’s distressed market could produce double-digit returns, the International New York Times reported.

Indian central bank Deputy Governor Viral Acharya said injecting new funds into lenders won’t resolve the nation’s stressed asset plight until companies take steps to reduce debt, Bloomberg News reported. The Reserve Bank of India is seeking to strengthen the banking system through measures including merging weaker banks and pushing to privatize some state-run lenders as it ramps up efforts to resolve the world’s highest stressed-asset ratios. Banks would be happy to lend but there is no demand from corporates as they are heavily indebted, he said in a speech in Kolkata on Friday.

In a related story, the Financial Times reported that State Bank of India, the country’s largest lender, has reported earnings slightly ahead of analyst expectations for the first three months of 2017, along with a stabilisation of its hefty burden of bad loans. The bank’s net profit was Rs28.1bn ($430m) in the period, compared with a consensus forecast of Rs26.7bn by analysts polled by Bloomberg. This compared with Rs12.6bn in the same period of last year.

A mountain of bad debt in India's banking system has led to a prolonged credit crunch that is inflicting most pain on small- and medium-sized enterprises (SMEs) such as Pandey's that depend upon banks for their day-to-day working capital and longer-term borrowing needs. India has more than 45 million such enterprises, accounting for nearly 40 percent of gross domestic product, Reuters reported. Smaller businesses also account for the bulk of job creation, so a lack of bank credit reaching them threatens Prime Minister Narendra Modi's promise to create 250 million jobs over the next decade.

Tata Steel has agreed a settlement “in principle” to the long-running pensions saga at its UK business, a deal that could remove the last hurdle to a merger of the group’s European steelmaking operations with those of German rival ThyssenKrupp, the Financial Times reported. The £15bn British Steel Pension Scheme has been an increasing financial burden on Tata Steel UK, the country’s largest steelmaker, which its Indian parent acquired in 2007. The deal “in principle” would mean handing over £550m and a 33 per cent stake in the UK subsidiary to the retirement fund.

India’s finance minister Arun Jaitley was in bullish form last week, touting the government’s move to give the central bank powers to force action by lenders on distressed loans, the Financial Times reported. This would be key to fixing the huge bad debt burden weighing on India’s state-owned banks, which stemmed largely from just a few dozen big corporate accounts, he told a conference in Tokyo. “To resolve between 30 and 50 accounts is not very difficult, if the [Reserve Bank of India] is empowered to give direction to the banks,” he said.

Indian conglomerate Piramal Enterprises said it is looking to expand its real estate development business and also expects to have a licence to start providing home mortgages by July. The Mumbai-based group, whose interests range from pharmaceuticals to financial services and real estate financing in India's big cities, said it now plans to finance top property developments in second-tier cities, Reuters reported.