Fitch downgrades Tata Metal, JSW Metal to BB- from BB, outlook unfavorable

Mumbai: Fitch Scores mentioned on Friday it has downgraded the issuer default scores (IDR) of Tata Metal and JSW Metal to ‘BB-‘ from ‘BB’, with unfavorable outlook, on expectations of decline in metal demand in India.

The portfolio evaluate follows the scores company’s expectation of a decline in metal demand in India for the yr ending March 2021 in contrast with its earlier assumption of a mid-single-digit quantity improve, because of the financial influence of the coronavirus pandemic.

Fitch has additionally downgraded Tata Metal UK Holdings Restricted’s (TSUKH) Lengthy-Time period IDR to ‘B-‘ from ‘B’. The company has additionally downgraded JSW Metal and Tata Metal’s senior unsecured score to ‘BB-‘ from ‘BB’.

It withdrew TSUKH’s long-term IDR as a result of TSUKH is now not issuing debt and there’s no Fitch-rated debt excellent following refinancing by TSL for its European operations in January 2020

Fitch pointed at Indian Metal Affiliation’s forecast of an eight per cent drop in home demand in FY21, and the scores company assumes standalone gross sales quantity for Tata Metal and JSW Metal will decline by 6 per cent

“We additionally anticipate a decrease EBITDA margin in FY21 because of the quantity drop and weaker metal costs. We assume quantity and margins will improve considerably in FY22 from a weak base, supported by a broader financial restoration,” Fitch mentioned in a launch.



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