Ratings agency warns of risks for Tata Steel in Corus takeover plan

0 Comments | AFP, October, 2006

NEW DELHI (AFP) — India's Tata Steel could face financial strains in its 7.56-billion-dollar proposal for Anglo-Dutch steelmaker Corus Group, global credit ratings agency Standard and Poor's warned. Corus Group confirmed Tuesday it had received a takeover approach from Tata, India's biggest private steel firm, that valued the steelmaker at 4.05 billion pounds (6.03 billion euros, 7.56 billion dollars).

Analysts believe Tata might have to sweeten any formal bid to win control of Corus and might also have to fend off offers from rival suitors for the firm such as Russia's Severstal. "The size of the acquisition and the potential cash outflow of about 10 billion dollars that Tata Steel may make in its offer to Corus could have an adverse impact on its financial risk profile,"...