New Delhi: Fitch Ratings on Friday revised its outlook on domestic steel major Tata Steel to negative on account of uncertainty surrounding the turnaround of the company’s operations in the UK. However, the expected robust growth in Tata Steel’s India operations and likely earnings before interest, taxes, depreciation, and amortization profits at its Dutch operations in FY25 may offset any losses from the UK operations, Fitch Ratings said in a report.
“Fitch Ratings has revised the outlook on India-based Tata Steel Limited’s (TSL) investor default rating (IDR) to negative from stable and adjusted the IDR to ‘BBB-‘. “We have also affirmed the rating on the $1 billion notes due July 2024 issued by TSL’s subsidiary ABJA Investment and guaranteed by TSL at ‘BBB-“,” the statement said.
Fitch further said that the change in the UK government and the labor union’s actions to save job losses at TSL’s UK operations may delay its plan to reduce losses through FY25. Tata Steel owns 3 million metric tons per year of capacity at Port Talbot and employs around 8,000 people across all its operations in that country.