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| S&P's rating services revises outlook on Tata Power |
| BS Reporter / Mumbai Sep 14, 2009, 16:04 IST |
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Standard & Poor's Ratings Services revised its outlook on Tata Power, a private utility company, to positive from stable. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating and long-term senior unsecured debt rating on the company.
S&P revised its outlook on Tata Power to reflect the progress made by Tata Power on its two key projects, 4,000 Mw Mundra project and 1,050 Mw Maithon project, and the strengthening of its business position.
"Both projects are currently running ahead of schedule and within estimated costs," said Standard & Poor's credit analyst Yasmin Wirjawan.
The report further stated that Tata Power continues to pursue an ambitious growth strategy and has a project pipeline aggregating about 6,000 Mw of capacity. However, these projects in pipeline are in a nascent phase and have not been factored into the rating.
“The rating on Tata Power could be raised if the company completes the Maithon project on schedule and ensures no slippages on the progress with the Mundra project. Also, this is assuming that the company does not undertake any new capital expenditure plan that involves significant cash outlay in the next 18-24 months or a large debt-financed acquisition,” stated the report.
The outlook could be revised to stable if the company's cash flow protection measures are not expected to improve after fiscal 2011.
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