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| Tata Motors invites FDs from public to raise Rs 1,500 cr |
| Press Trust of India / New Delhi Aug 26, 2009, 17:38 IST |
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Within less than a year, the country's largest auto maker, Tata Motors, has come to the public for the second time to raise about Rs 1,500 crore via fixed deposit schemes, offering up to 9.88 per cent annual interest for a three-year deposit.
In a public announcement, the firm today said on a minimum fixed deposit of Rs 20,000 for two and three years, it would offer 8 per cent and 8.75 per cent interest respectively under the quarterly income plan.
Under another scheme of cumulative deposit plan, Tata Motors, which met with cold response from investors to its two separate rights issues last year to raise Rs 4,147 crore to partly fund its Jaguar and Land Rover deal, would offer 8.58 per cent interest on a minimum deposit of Rs 20,000 for two years and 9.88 per cent for three years.
Though the company has not said how much it plans to raise through this exercise, sources close to the development said Tata Motors is likely to raise about Rs 1500 crore from the public. It would be a part of the company's capex plan for the next few years.
As per Companies (Acceptance of Deposits) Rules, 1975, amended by the Companies (Acceptance of Deposits) Rules, 1978, Tata Motors could raise up to Rs 3,030.26 crore from public, while it could have Rs 1,212.10 crore from its shareholders.
In December 2008, it borrowed between Rs 2,000 crore and Rs 2,500 crore from public at an annual interest rate of up to 11 per cent for a period of up to 3 years as it was struggling to finance its $2.3 billion JLR buyout.
In July last year, the company had got Board approval to raise up to Rs 7,200 crore through separate rights issues to part-finance the buyout of JLR.
Its right issue, however, closed in October with a weak response from the public, forcing the promoters to subscribe a major chunk thereby taking their holding to 42 per cent from earlier 33 per cent.
Tata Motors had suffered a net loss of Rs 2,505.25 crore in 2008-09 mainly on account of JLR that it acquired in March 2008. The expensive JLR marquee suffered on account of the economic meltdown.
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