The Hindu Business Line : S&P retains Tata Steel on rating watch

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Mumbai Jan. 31 Rating agency Standard & Poor's maintained its `BBB' long-term corporate credit ratings on Tata Steel on CreditWatch with negative implications.

At the same time, S&P retained its `BBB' foreign currency rating on Tata Steel's senior unsecured bank loans of $750 million and $500 million on CreditWatch with negative implications.

This follows the UK Takeover Panel's announcement on the completion of the auction procedure between Tata Steel and Brazil-based steel manufacturer Companhia Siderurgica Nacional for the takeover of UK-based steelmaker Corus Group Plc.

The ratings were placed on CreditWatch on October 18, 2006, after Tata Steel's initial bid for Corus at 455 pence per share. This bid was revised to 608 pence per share on January 31.

"The size of the acquisition and the potential cash outflow in Tata Steel's offer for Corus could have an adverse impact on its financial risk profile," said Standard & Poor's credit analyst Mr Anshukant Taneja. "In addition, the company could face challenges related to the integration and improvement of Corus' comparatively weaker business profile," the agency said in a release.

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