S&P keeps Tata Motors on creditwatch

Agencies

Posted: Tuesday, Jul 08, 2008 at 1412 hrs IST
Updated: Tuesday, Jul 08, 2008 at 1412 hrs IST


Font Size

Print

Feedback

Email

Discuss

New Delhi, July 8:: Standard & Poor’s has kept the corporate rating of Tata Motors on creditwatch with negative implications, as the long-term funding plans for its acquisition of British marquees from Ford Motor is still awaiting finalisation.

“Standard & Poor’s Ratings Services has kept its ‘BB’ corporate credit rating on Tata Motors on creditwatch with negative implications, pending finalisation of the long-term financing plans for funding the purchase of Jaguar and Land Rover from Ford Motor Co,” the global rating agency said in a statement.

The rating on Tata Motors was lowered to ‘BB’, from ‘BB+’ on April 4, after the announcement of the agreement with Ford Motor for the purchase of Jaguar and Land Rover.

“To fund the initial transaction, Tata Motors raised short-term bridge facilities of three billion dollar, which it plans to repay through a mix of fresh equity infusion, liquidation of investments, and long-term debt,” Standard & Poor’s credit analyst Anshukant Taneja said.

Tata Motors has obtained board’s approval to raise up to 1.05 billion dollar through a rights issue of equity shares, up to 750 million dollar of optionally convertible preference shares, and 500-600 million dollar through a separate issuance of securities in overseas markets.

Tata Motors acquired the British marquees for 2.3 billion dollar from Ford Motor Co in a landmark deal that made the Indian company the only vehicle maker to offer a choice of cars, spanning from the ultra cheap Nano to the luxurious Jaguar.

The company has paid about 2.3 billion dollar in cash for Jaguar and Land Rover, comprising brands, plants, and intellectual property rights.

Ford has contributed 600 million dollar to the Jaguar-Land Rover (JLR) pension plans.

The creditwatch status is expected to be resolved as greater clarity and certainty is established on the long-term financing arrangements, S&P said and added that there are less chances of the rating being lowered further.

More from Automobiles

Discuss this story on expressindia forums

Post Comments

Comments: (Limit 3,000 characters)
Name
Message
Email ID
Subject
TERMS OF USE:
The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
I agree to the terms of use.

Comments
Flowers & Cakes DeliveryExpress Classifieds
Post and view free classifieds ad
Express Astrology
Know what's in the stars for you