The Hindu Business Line : Swiss acquisition won't affect TCS credit profile: Moody's

NEW DELHI: Global rating agency Moody's on Wednesday said Tata Consultancy Services' acquisition of Swiss company TKS-Teknosoft would not affect the credit rating profile of the software giant.

"The acquisition cost of CHF 100.5 million (Swiss francs) is small compared to the size of TCS. Moreover, the acquisition has been funded by TCS's cash reserves. So, there has not been any material impairment to the company's strong existing credit metri cs," Mr Ken Chan, Assistant Vice President and Analyst, Moody's said.

The rating agency affirmed the 'A3' issuer rating with 'stable' outlook and an indicative foreign currency debt rating of 'Baa1' with 'stable' outlook for the company, a Moody's release said here. TCS, India's largest software exporter, had yesterday announced acquiring 75 per cent equity stake in TKS-Teknosoft.

Mr Chan noted with the acquisition TCS now has full control over its banking and financial products in the European market. Other Tata Sons' companies hold the remaining 25 per cent stake, the release noted.

Moody's said the ratings continue to reflect the company's credit strength including its dominant market position and the favourable long term IT outsourcing trend. - PTI

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