Tata Motors to raise Rs9,770 crore to fund Jaguar-Land Rover acquisition

28 May 2008

Tata Motors will raise up to Rs9,770 crore through rights offers and an overseas issue of securities to finance the $2.3 billion acquisition of Ford Motor Co's UK luxury brands Jaguar and Land Rover.

The company plans to raise a total of about Rs7,200 crore through three simultaneous but separate rights issues, including an issue of equity shares worth up to Rs2,200 crore, Tata Motors said in filing with the Bombay Stock Exchange. (View the Jaguar | Land Rover picture gallery)

The board of Tata Motors proposed to raise about Rs 2,000 crore through a rights issue of 'A' equity shares carrying differential voting rights of one vote for every 10 'A' equity shares and another Rs3,000 crore through a rights issue of five-year 0.5 per cent convertible preference shares (CCPs).

In view of the time taken to complete the procedures and documentation involved in making rights issues, the precise terms of the above issues, ie, ratios on which these securities would be offered, the offer price and the conversion price of the CCPs, will be decided when the issues are made, the company said.

The issues are subject to such approvals and clearances as may be required and may undergo some changes during this process, it added.

On completion of the rights issues, the company plans to raise about $500/600 million (about Rs2,569 crore) through an issue of securities in the overseas markets on terms to be decided at that time.