TATA Steel JV with Thyssenkrupp to improve credit profile – Fitch Rating


TATA Steel JV with Thyssenkrupp to improve credit profile – Fitch Rating

Economic Times reported that Tata Steel’s ink a definitive agreement with Thyssenkrupp for a 50:50 steel joint venture in Europe will improve TSL’s business profile by reducing its exposure to structural weaknesses in the region.

Fitch Ratings said that however the gain is likely to be offset by a relatively high level of leverage over the next 2 to 3 years due to acquisitions in India.

While Tata Steel has already acquired Bhushan Steel Ltd, it is also tipped to be a front runner in acquiring debt-stricken Bhushan Power and Steel under the insolvency resolution process. While Fitch has highlighted the significance of TSL’s Indian business, which benefits from vertical integration, the report maintained that leverage remains a concern for TSL.

The report said that “We have assumed EBITDA of around Rs 4,500 crore from BSL in FY20, based on an output of 5 million tonnes and an EBITDA per tonne of around INR 9,000 for the plant, which does not benefit from the use of captive raw materials Read More

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