Tata Chemicals bank facilities get CARE ‘AA+’, 'PR1+' ratings
The Economic Times — March 25, 2009

CARE has assigned ‘CARE AA+’ rating to the long-term bank facilities of Tata Chemicals Ltd, indicating they are offer high safety for timely servicing of debt and carry very low credit risk.

Further, CARE has assigned ‘PR1+’ rating to the company’s short term facilities. Facilities with this rating have strong capacity for timely payment of obligations and carry lowest credit risk.

The ratings derive strength from the well-established promoter group, diversified product profile, favourable competitive position Tata Chem enjoys in its core businesses due to well-integrated & largest soda ash facility in India and competitive position in fertiliser segment on account of efficient production operations.

Further, the ratings factor in the leading position of the company in soda ash business globally (second largest) with major proportion of facilities being natural soda ash and geographically-spread operations spanning four continents. Healthy profitability, moderate leverage (standalone basis) and comfortable interest coverage further add strength to the ratings.

The ratings also factor in a largely debt-funded acquisition of General Chemical Industries Product, which has resulted in a higher leverage on the consolidated level.

Tata Chem’s ability to maintain the profitability margins especially in the current economic environment characterised by the slowdown in demand especially for soda ash segment remains to be the key ratings sensitivity.