Standard

Singapore, Jan 8 (UNI) Standard&Poor's Ratings Services has placed its 'BB+' long-term corporate credit ratings on India-based automaker Tata Motors Ltd on Credit Watch with negative implications.

At the same time, Standard&Poor's placed its 'BB+' foreign currency rating on all of Tata Motor's rated debt issues on CreditWatch with negative implications.

''This action follows the recent announcement by Ford Motor Co (B/Stable/B-3) that the company is in focused discussions with Tata Motors on the potential sale of Ford Motor's Jaguar and Land Rover business units,'' said Standard&Poor's credit analyst Anshukant Taneja.

''This would be a large scale acquisition for Tata Motors that could potentially have a negative impact on the corporate credit ratings on the company, especially if it is heavily funded by debt,'' Mr Taneja said in a statement yesterday.

Standard&Poor's notes that both parties are entering a period of more focused and detailed negotiations and that this acquisition has to cross several milestones with no binding agreement as yet.

Tata Motors is India's largest manufacturer of commercial vehicles and the second largest in passenger vehicles.

In fiscal 2007, the company sold a total of 589,428 vehicles with revenues of Indian rupee (INR) 366.4 billion and net income of INR21.7 billion.

For the financial year ended March 31, 2007, Tata Motors' adjusted total debt/EBITDA was 1.9x and FFO/total debt was 39.9%.

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