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 finalization. "Standard & Poor's Ratings Services has kept its 'BB' corporate credit rating on Tata Motors on creditwatch with negative implications, pending finalization 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 US$3 billion, 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 US$1.05 billion through a rights issue of equity shares, up to US$750 million of optionally convertible preference shares, and US$500-600 million through a separate issuance of securities in overseas markets. Earlier Tata Motors acquired the British marquees for US$2.3 billion from Ford Motor Co in a landmark deal.
