Crisil upgrades ratings on Tata Teleservices’ bank loan facilities
New Delhi: Tata Teleservices (Maharashtra) Ltd on Wednesday said Crisil has upgraded the ratings on its bank loan facilities of Rs5,166 crore.
The credit rating agency cited the “strong support” expected from Tata Sons to Tata Teleservices and its associate TTML as rationale for the upgrade. “Crisil has upgraded its ratings on the bank loan facilities of Tata Teleservices (Maharashtra) Ltd (TTML) to ‘CRISIL AA-/CRISIL A1+’ from ‘CRISIL A/CRISIL A1’,” TTML said in a regulatory filing.
Crisil’s AA rating indicates high degree of safety regarding timely servicing of financial obligations. The ratings have been removed from ‘watch with developing implications’ and a ‘stable’ outlook has been assigned to the long-term facilities, the rating agency said in a statement.
Tata Sons intends to invest Rs20,000 crore in Tata Tele (against the earlier plan of Rs14,000 crore) that will be used primarily for repaying debt. The remaining bank debt is expected to be refinanced through debt instruments of short to medium term maturity, the statement said, adding that Tata Sons will work with Tata Tele in case the latter needs to arrange for any shortfall in liquidity that may be required for on-time debt repayment.
“Crisil had placed its ratings on Tata Tele on ‘Watch with Developing Implications’ on October 17, 2017, following announcement by TTML to combine Tata Tele’s consumer mobile business with Bharti Airtel,” it noted.
Tata Tele has also announced plans of divesting its enterprise, and fixed line and broadband businesses to group companies. “Crisil has received clarity over likely timelines for divesting the consumer mobile and other businesses, and the overall debt reduction plan, and believes Tata Sons’ continued support will enable Tata Tele to meet external liabilities in a timely manner,” the statement said.