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Tata Motors postpones fund raising, seeks $2 Billion refinancing
By siliconindia
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Monday, 06 April 2009, 23:43 IST
Mumbai: Seeking refinancing of $2 billion of a bridge loan worth $3 billion, India's largest commercial vehicle maker Tata Motors has postponed its plans for overseas equity issue and sale of investments. The company has to repay $2 billion in the bridge loan that it took for acquiring the Jaguar and Land Rover (JLR) brands from Ford in June last year. Tata has now asked the lenders to refinance the remaining amount of the bridge loan as a term loan, reported Business Standard.
Tata has already repaid $1 billion of the bridge loan from the proceeds of a rights issue and stake sales in group firms Tata Steel and Tata Teleservices to other Tata companies. As financial downturn worsened further, the company could not raise the remaining amount by April, as originally planned.
A Tata Motors spokesperson said that Tata Motors is in discussions with banks on re-financing the remaining $2 billion. "The company will continue to pursue further divestment plans as outlined earlier, judiciously and in the right market conditions," spokesperson further added.
Citigroup and JP Morgan were the lead managers to the $3 billion loan, which was raised with the help of other banks such as State Bank of India, Standard Chartered, BNP Paribas and Tokyo Mitsubishi UFH.
"It will take at least four to six weeks before the refinancing issues are finalized, since the banks are renegotiating the loan terms," said a banker familiar with the developments.