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Tata Motors Sinks Deeper into “Junk” Credit Status
S&P Global Ratings has lowered its credit rating for Tata Motors Ltd. for the second time in five months, sinking the Indian carmaker two steps into “junk” status.
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S&P Global Ratings has lowered its credit rating for Tata Motors Ltd. for the second time in five months, sinking the Indian carmaker two steps into “junk” status.
S&P cites worse-than-expected performance of the company’s domestic operations and its U.K.-based Jaguar Land Rover unit. Tata Motors reported a net loss of 10.5 billion rupees ($149 million) for July-September, thanks to slumping JLR sales in most of its major markets.
S&P’s latest downgrade drops the carmaker’s long-term credit rating to BB- from BB. The rating agency also has put Tata Motors on a negative outlook for at least 12 months because of continuing uncertainties about the impact on JLR when the U.K. exits the European Union at the end of March.
Tata tells investors it is launching Project Charge, a very aggressive cost-cutting program for JLR, which has generated most of its corporate profits over the past several years. The 2-3-year program aims to deliver a £2.5 billion ($3.2 billion) improvement in cost, cash and profits within 18 months.
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