New Delhi, Fitch Ratings on Friday revised its outlook on domestic steel major Tata Steel to negative due to uncertainty over the turnaround of the company's operations in the UK.
However, expected strong growth in Tata Steel's India operations and potential earnings before interest, taxes, depreciation and amortization (EBITDA) profits at the Dutch operations in FY2025 will offset any losses in the UK operations, Fitch Ratings said in a report. Can compensate.
"Fitch Ratings has revised the Outlook on India-based Tata Steel Limited (TSL) Issuer Default Rating (IDR) to Negative from Stable, and affirmed the IDR at 'BBB-'.
"We have also affirmed the 'BBB-' rating on US$1 billion of notes due July 2024 issued by TSL's subsidiary ABJA Investment Company Pte. Ltd. and guaranteed by TSL," the statement said. Uncertainty regarding transition to UK operations.
The rating agency further said that changes in UK government and labor union actions to avert job losses at TSL's UK operations could delay plans to reduce losses until fiscal 2025.
Tata Steel owns a 3 million tonne per annum (MTPA) Port Talbot plant in South Wales and employs about 8,000 people across all its operations in that country.
As part of its decarbonization plan, the company is shifting from the blast furnace (BF) route to the low-emissions electric arc furnace (EAF) process which is nearing the end of its life cycle.
In September 2023, Tata Steel and the UK government agreed to a joint investment plan of £1.25 billion to execute decarbonization plans at the Port Talbot steel making facility in the UK.
Of the £1.25 billion, £500 million was provided by the UK Government.
However, expected strong growth in Tata Steel's India operations and potential earnings before interest, taxes, depreciation and amortization (EBITDA) profits at the Dutch operations in FY2025 will offset any losses in the UK operations, Fitch Ratings said in a report. Can compensate.
"Fitch Ratings has revised the Outlook on India-based Tata Steel Limited (TSL) Issuer Default Rating (IDR) to Negative from Stable, and affirmed the IDR at 'BBB-'.
"We have also affirmed the 'BBB-' rating on US$1 billion of notes due July 2024 issued by TSL's subsidiary ABJA Investment Company Pte. Ltd. and guaranteed by TSL," the statement said. Uncertainty regarding transition to UK operations.
The rating agency further said that changes in UK government and labor union actions to avert job losses at TSL's UK operations could delay plans to reduce losses until fiscal 2025.
Tata Steel owns a 3 million tonne per annum (MTPA) Port Talbot plant in South Wales and employs about 8,000 people across all its operations in that country.
As part of its decarbonization plan, the company is shifting from the blast furnace (BF) route to the low-emissions electric arc furnace (EAF) process which is nearing the end of its life cycle.
In September 2023, Tata Steel and the UK government agreed to a joint investment plan of £1.25 billion to execute decarbonization plans at the Port Talbot steel making facility in the UK.
Of the £1.25 billion, £500 million was provided by the UK Government.
