Tata in Talks with Its Lenders

author image Rishi
Tuesday 07 April 2009, 00:00 AM

Tata Motors stated that the company is in talks with its lenders to refinance the remaining portion of its bridge loan required to pay off its acquisition of Jaguar and Land Rover. "Tata Motors is in discussions with banks on re-financing the balance of $2 billion, due in end May," a Tata Motors spokesperson said.

Tata Motors has acquired Land Rover and Jaguar brands from Ford last year for $2.3 billion out of which $1 billion has already been paid. The Tata official gave only the outlines of the refinancing talks with the lenders and refused to give any further details. He stated that details will be made available at “appropriate time.”

The company has been struggling to raise long-term funds to replace the bridge loan. In July 2008, it had got Board approval to raise up to Rs 7,200 crore through separate rights issues. Subsequently, it came up with two separate issues to raise Rs 4,147 crore, which met with cold response from investors and the promoters had to subscribe and increase their stake to 42 per cent from earlier 33 per cent.

Tata Motors opens its bookings for its ultra-cheap car from April 9 which would mean more fund flow for the company.

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