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Moody's may cut Tata Motors
Moody's Investors Service said it continues to review for possible downgrade the Ba1 corporate family rating of Tata Motors Ltd. following news that it entered into an agreement with Ford Motor Co. to purchase Jaguar Land Rover comprising brands, plants and intellectual property rights for about $2.3billion. The purchase consideration includes about $600million to be contributed by Ford to the JLR Pension funds.
Moody's said it expects to close the review upon the completion of the deal, which is still subject to various regulatory approvals, in the second quarter of 2008. The rating is likely to be revised to Ba2, the agency said.
A downgrade would reflect the considerable challenges that Tata Motors will face in integrating such a large operation and the impact on the company's financial profile, the agency said.
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