Fitch revises outlook on Tata Steel to stable

Tags: Fitch, News
Credit rating agency Fitch today revised outlook on Tata Steel and its subsidiary Tata Steel UK Holdings Ltd to stable from negative on possible improvement in its financial profile.

"The outlooks have been revised to stable from negative .... The Outlook revision reflects Fitch's expectations of improvement in TSL's (Tata Steel) financial profile in the near to medium term," Fitch Ratings Singapore said in a statement.

It affirmed the long-term foreign currency issuer default rating on Tata Steel at BB plus. The agency also affirmed the B plus long-term foreign currency issuer default rating on Tata Steel UK Holdings.

Fitch said Tata Steel’s strong cash generation is expected to support the company’s deleveraging over the medium term despite debt levels likely to peak in FY 2015 as the company expands its capacity in India.

"Fitch expects TSL's financial profile to moderate with net leverage improving to below 4x by the year ending 31 March 2015. Fitch expects TSL's strong cash generation to support the deleveraging over the medium term. This is even though debt levels are likely

to peak in FY15 as the company expands its capacity in India," it said.

Tata Steel is among the top ten global producers of steel with a capacity of over 29 million tonnes (MT) and has undertaken expansion drive.

Fitch said the commissioning of the first phase of its new plant at Odisha in the fourth quarter of FY 2015 will also support stronger earnings. The first phase of the new plant is expected to add 3 million tonnes per annum (MTPA) of capacity.

It also added that the performance of TSUKH (Tata Steel UK Holdings) has improved over the last four quarters and "Fitch's expectation of a sustained improvement in TSUKH's profitability is underpinned by the modest improvement in market conditions for western European steel producers and TSUKH's on-going cost rationalisation measures and improving product mix."

EDITORIAL OF THE DAY

  • Public musn’t pay for domestic servants for our diplomats

    Nothing seems to have changed in the year and half since the fur that flew thick and fast over the case of diplomat Debjani Khobragade and her maid Sa

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

Economic integration in east Asia

As trade agreements within a global framework have become increasingly ...

Rajgopal Nidamboor

Up the ante of your conscious existence

It sounds cryptic, but is not as complex as it ...

Gautam Gupta

The ‘fake’ issue needs to be taken seriously

E-commerce players are witnessing unbelievable growth globally. Competition is increasing ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture