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by Brett Davis

Jaguar and Land Rover owner Tata Group has announced it has plans to raise over $1 billion (AUD) to expand its operations. The company would also like to strip the debt it accumulated after purchasing the luxury car brands, Jaguar Cars and Land Rover, for 2.8 billion (approximate AUD) in 2008.

The company took on loans to purchase the luxury vehicle unit from Ford Motor Co. and had a debt of 185.3 billion rupees (approximately AUD$4.6 billion) at the time, according to Bloomberg data.

“The timing and structure of the issues will be decided depending upon market conditions post shareholders’ and other approvals,” Tata Motors said in a recent statement.

History tells us that Tata is likely to reach its goal – during October last year, Tata raised $860 million (approximate AUD) selling global depository receipts and convertible bonds. The company also raised $1 billion (approximate AUD) through rights offer deals associated with the Tata Nano – the world’s cheapest car.

“Tata may take about 6 months to one year to raise the full amount,” Umesh Karne, a Mumbai-based analyst at BRICS Securities Ltd. said. “They may be able to get good valuation as the Indian auto industry is doing very well and there are no big concerns in the short term.”

Once the funds have been raised, Tata Group is hoping to expand its business by opening more luxury car showrooms in India and setting up large business deals in China.




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