May
28 2008 Tata plans
rights issue to fund Jaguar buy
Tata
Motors has said it would raise up to US$1.7bn through three simultaneous rights
issues of various securities to help fund its purchase of the Jaguar and Land_Rover
brands, which it expects to close by June. According
to Reuters, Tata said it would then raise $500-$600 million by way of issuing
securities in foreign markets, as previously planned, and was considering various
options including the Tokyo Exchange. The
funds would be mainly used for the $2.3 billion purchase of the Jaguar and Land
Rover brands from Ford, which is being done through a wholly owned UK subsidiary,
the report added. "Though
the initial acquisition cost will be financed through bridging loans provided
by a syndicate of banks, these loans would be fully repaid through the above-mentioned
capital raising schemes," India's top vehicle maker said. The
three rights issues comprise equity shares, "A" shares and convertible
preference shares, it said. Tata
Motors has previously announced plans to raise $4 billion for its local and overseas
plans, Reuters said. On
Wednesday it said it would spend about INR100bn to expand manufacturing capacities
and develop more than 100 new products and variants for an increasingly competitive
market. It will
also continue to look at acquisitions and strategic alliances for growth in the
local and overseas markets, it said. Tata
, which has manufacturing and distribution ventures with Fiat, also said it was
in discussions with the Italian automaker on deals with truck maker Iveco on various
options, the news agency added. | 