Tata Motors under ICRA's ratings watch with negative implications
05 Jan 2008
Mumbai: ICRA has placed Tata Motors Ltd (TML) on rating watch with negative implications from the stable outlook.
Tata Motors had LAA+ rating outstanding on its Rs 4,000-crore fund based limits, indicating high-credit quality of the rated instrument. TML also has A1+ rating outstanding on the company's Rs20-crore non-fund based limits, the highest-credit-quality rating assigned by ICRA in the short term.
The rating watch reflects the likely increase in the business and financial risk profile of the company, in the event of successful conclusion of Jaguar and Land Rover acquisitions, where Ford has announced focused discussions with Tata Motors concerning potential sale of the combined Jaguar Land Rover business.
ICRA says it would take further rating action as and when full details of the proposed acquisition are made available. Should the proposed acquisition fall through, the rating watch is likely to be removed, restoring back the stable outlook.