From Coventry Evening Telegraph
India automotive giant Tata Motors, which is poised to buy Jaguar and Land Rover, plans to borrow half a billion pounds on the money markets.
The firm’s board of directors confirmed yesterday the money was needed to fund its expansion plans at home and abroad.
As well as wanting to buy the luxury Jaguar and Land Rover marques, Tata is launching its own super-cheap car for the Indian market.
Business magnate Ratan Tata is hoping the Nano, the world’s cheapest car, priced at about $2,500, will revolutionize motoring in his home country.
The cost of buying Jaguar and Land Rover from Ford is thought to exceed the half a billion pounds which Tata Motors wants to borrow – but the Indian firm is thought to be cash-rich and extremely creditworthy.
Professor Lord Kumar Bhattacharyya, founder of Warwick Manufacturing Group, now known as WMG, at Warwick University, said, "They’re just about to finalize buy Land Rover and Jaguar, and they’re going into production with the Nano.
"And they’re changing their model ranges of trucks and cars and for that they’re raising money. This is quite normal. This is a natural progression."
Des Quinn, regional industrial organizer of the T&G section of Unite trade union, said the sale process was "steaming ahead" and unions were satisfied with assurances they’d been given on jobs.
Quinn said, "We believe it’s in the best interest of our members for the long term security of their jobs, terms and conditions and pensions that the sale goes through … Really we’re just waiting now for the memorandum of understanding to be signed between Tata and Ford and the legal processes to be complete."
The statement issued by the Tata Motors board said they intended to raise 4,000 crorer Indian rupees on the markets. One crorer is 10 million rupees and the whole sum is roughly $1 billion.
The board continued, "The company has major growth plans for expanding its position in the domestic and global markets in both the commercial vehicle and passenger vehicle business.
"This will be achieved by upgrading and enhancing the company’s product portfolio, expanding manufacturing facilities in India and strategic acquisitions/alliances in India and abroad.
"While this may require expenditure for organic growth over the next three to four years, the acquisition opportunities will have to be financed up front.
"The said funds are being raised to part finance overall funding requirements to meet some of the strategic plans."
(C) 2008 Coventry Evening Telegraph. via ProQuest Information and Learning Company; All Rights Reserved
