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| Tata Motors to borrow from public to fund JLR buy |
| Press Trust of India / New Delhi Dec 01, 2008, 20:23 IST |
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Struggling to finance its $2.3 billion purchase of Jaguar and Land Rover (JLR), home-grown auto major Tata Motors is looking to borrow from public, offering up to 11 per cent annual interest for a period of up to three years.
The company, which met with cold response from investors in its two recent separate rights issues to raise Rs 4,147 crore for part funding JLR deal, said in a public announcement that it would offer 10 per cent interest on a minimum public deposit of Rs 20,000 for a year, 10.5 per cent for two years and 11 per cent for three years.
This is the first time since 1995 that Tata Motors is borrowing from public.
When contacted a company spokesperson declined to comment how much capital the company was looking to raise through the public deposits and also the purpose for such a step.
It, however, is clear that the company needs fund to replace the $3 billion bridge loan it had taken to acquire JLR, the transaction for which was completed in June.
In July, the company had got board approval to raise up to Rs 7,200 crore separate rights issues to part-finance 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 holing to 42 per cent from earlier 33 per cent.
The company's stocks closed 2.64 per cent down on the BSE at Rs 132.75.
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