Tata Teleservices Maharashtra (TTML) today said its proposed Commercial Paper worth Rs 6,500 crore has been assigned 'Credit Watch with Developing Implications' by Care Ratings, on the back of Tata Group' plans to transfer its consumer mobile business to Bharti Airtel.
"The ratings on the CP (Commercial Paper) issue of TTML are placed on 'Credit Watch with Developing Implications' on account of the announcement by TTSL (Tata Teleservices Limited) and TTML to combine their consumer telecom business with Bharti Airtel," the company said in a regulatory filing on the ratings.
The rating underlined the "financial flexibility" enjoyed by the company for being part of the Tata group "characterised by demonstrated continued support from Tata Sons".
"Also, Tata Sons will work with Tata Tele in case it needs to organise for any shortfall in liquidity to meet external liabilities in timely manner, as may be required.
"The rating strengths are, however, tempered by continued losses, high leverage position on account of significant debt funded capital expenditure and intense competition in the industry," it said giving the Care Ratings update.
The timely completion of the sale of its consumer telecom business, the ability to stem losses in the face of stiff competition and continued support from the Tata Group remain the key rating sensitivities, it added.
In a separate BSE filing, TTML also said Crisil has assigned its 'CRISIL A1+' rating on the commercial paper programme (Rs 6,500 crore) and that the rating agency has reaffirmed its 'CRISIL AA-/Stable/CRISIL A1+' ratings on the bank facilities (totalling Rs 5,166 crore).
Crisil's A1 rating reflects strong degree of safety on timely payment of financial obligations, while AA rating underscores a high degree of safety on timely servicing of obligations.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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