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| JLR plans to raise Rs 7,300 cr |
| Press Trust of India / New Delhi May 09, 2011, 20:56 IST |
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Tata Motors today said its UK-based subsidiary Jaguar Land Rover (JLR) will raise 1 billion pound (over Rs 7,300 crore) to refinance existing debt and other purposes.
"Jaguar Land Rover Plc, the parent company of Jaguar Cars and Land Rover, announces the offer of sterling and US dollar denominated senior notes of 1,000 million pounds equivalent," Tata Motors informed the Bombay Stock Exchange (BSE) about a statement issued by the British arm.
Senior notes are debt instruments that takes priority over other unsecured or otherwise more "junior" debt owed by the issuer.
"The net proceeds from the issuance and the sale of the notes will be used to refinance existing debt and for general corporate purposes," the statement said.
While JLR's total debt couldn't be ascertained, parent Tata Motors' gross debt stood at about Rs 34,000 crore as on December 31, 2010.
The move by JLR to raise funds comes after a month of announcing that it would invest around 7.5 billion pounds (about Rs 54,000 crore) at least in the next five years, mainly on product development to catch up with global luxury car makers and position itself as a top premium brand.
Last year, JLR had raised 340 million pounds loan from the European Investment Bank for research and development.
In 2009 also, JLR secured over 500 million pounds of funding, including facilities from SBI, StanChart, Bank of Baroda, GE Capital, and Bank of Ireland.
Tata Motors had acquired JLR from Ford for $2.3 billion in 2008. To fund this acquisition, the homegrown auto major had taken a bridge loan of $3 billion, which has been mostly re-paid or refinanced.
Shares of Tata Motors today closed 1.9% down at Rs 1,178.15 on the BSE.
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