Tata Motors plans to raise $1 Bn to finance J-LR deal

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Mumbai: In order to finance its imminent acquisition of Jaguar and Land Rover from Ford Motor, auto major Tata Motors plans to raise nearly one billion dollar by selling securities in the domestic and international markets. The company board on Tuesday approved the fund raising proposal, reported The Economic Times. The company said, "The funds are being raised to part-finance overall funding requirements to meet some of the strategic plans." Tata Motors needs money to acquire the two Ford luxury brands as well as to launch the world's cheapest car, Nano, in October. "The company has major growth plans for expanding its position in the domestic and global markets in both the commercial vehicle and passenger vehicle business. This will be achieved by upgrading and enhancing the company's product portfolio, expanding manufacturing facilities in India and strategic acquisitions and alliances in India and abroad," the company said in a statement. The Tata Motors stock slipped 2.21 percent to Rs 659 on Tuesday after the announcement on selling securities. While the organic growth plan requires money over the next 3 to 4 years, the acquisition opportunities will have to be financed up front. A source close to the development said. Tata Motors will borrow from financial institutions to finance the Land Rover-Jaguar deal. The Tata is likely to fork out over $2 billion for the acquisition of these brands, which Ford has put on the block to shore up its balance sheet and reduce debt. It is learnt that the funds is being raised against the balance sheet of Tata Motors, that is, the borrowing will have an impact on the balance sheets of Jaguar and Land Rover.