The collapse of Tata Steel’s proposed joint venture with German conglomerate Thyssenkrupp is “marginally credit negative” for the Indian steel major, a global rating agency has said.
The steel major’s Indian operation will largely be able to offset the impact of the collapse, it said.
“Tata Steel Ltd and Thyssenkrupp AG’s decision to cease efforts on their proposed Europe joint venture is marginally credit negative for Tata Steel,” S&P Rating said in a bulletin in the wake of the development.
This is likely to depress the ratio of funds from operations (FFO) to debt by about 100 basis points across our forecast horizon, it said.
Tata Steel and the German conglomerate decided to call off their proposed steel joint venture (JV), expecting the deal to be rejected by the European Commission over “continuing concerns”.
“The cancellation of the joint venture will also leave Tata Steel exposed to the weaker and more volatile performance of the European operations until the