Tata’s rating down after Nano launch
Contrary to hopes, Standard & Poor’s, global ratings agency, cut the ranking of Tata Motors after the glitzy lauch of Tata Nano. S&P cleared that it did not comment on credit rating changes. S&P analyst Manuel Guerena explained that a material deterioration in cash flow, a difficult operating environment and high debt for cutting Tata Motors's rating to B+ from BB-. It is also suggested that the Tata Nano would contribute little to profits soon despite hopes. Tata Nano’s British luxury marques Jaguar and Land Rover have been badly effected by a slowing domestic economy and the deepening global financial crisis at the same period.
Contrary to hopes, Standard Poor’s, global ratings agency, cut the ranking of Tata Motors after the glitzy lauch of Tata Nano. SP cleared that it did not comment on credit rating changes. SP analyst Manuel Guerena explained that a material deterioration in cash flow, a difficult operating environment and high debt for cutting Tata Motors's rating to B+ from BB-. It is also suggested that the Tata Nano would contribute little to profits soon despite hopes. Tata Nano’s British luxury marques Jaguar and Land Rover have been badly effected by a slowing domestic economy and the deepening global financial crisis at the same period.
The company is still working to refinance the two billion dollars outstanding from a three billion dollar loan it took to pay for those acquisitions. Bankers have said the bridge loan issue must be resolved by early June.
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