S&P: Posco unaffected

Standard & Poor's said there would be no impact on its rating on Korea's Posco (A-/stable/--) from the company's plan to build a $12 billion steel plant in Orissa, India, with a capacity of 12 million tons per year.

Posco has signed a memorandum of understanding with the Orissa government and will initially spend $3 billion for a 3 million ton-capacity plant scheduled for completion in 2010.

Although the financing scheme for the project has not yet been decided, the company's extremely strong balance sheet and strong cash flow generation should sufficiently cover the investment, estimated to cost Korean won 3 trillion to 4 trillion per year over the next five years, the agency said.

However, Posco's increasing global expansion is a growing concern, S&P said.

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