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S&P lifts Tata Steel UK view to positive
S&P said it revised the outlook on Tata Steel U.K. Holdings to positive from stable following a similar outlook revision on Tata Steel Ltd., noting the continued strength of the relationship between the companies.
The diminishing prospect of the Bhushan Power and Steel acquisition and the sustained high steel prices in India are key factors for the outlook revision on Tata Steel, the agency explained.
S&P said it expects Tata Steel to successfully divest its European business housed under Tata Steel UK in the next two- to three-months as it is currently in the advanced stages of European anti-trust approvals.
The agency said it believes Tata Steel will continue to support Tata Steel UK's cash flow deficit as long as stand-alone operations continue prior to the formation of a joint venture with thyssenkrupp AG.
Support in the form of shareholder loans from Tata Steel have totaled £4 billion until fiscal 2018, although the agency said it expects the need for support to diminish in view of prevailing steel prices and earnings.
Until the joint venture is formed, the agency said it believes Tata Steel will continue to remain fully committed to support Tata Steel UK.
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