Mumbai: Tata Motors Ltd has received a loan to refinance 55% of the $2 billion (Rs9,540 crore) in debt that was due to come up for redemption on Thursday. The automobile maker owed the money for its purchase last year of the Jaguar and Land Rover brands from Ford Motor Co.
The company will repay the $1.1 billion offshore loan in a period of 18 months and will use $900 million raised via an issue of secured non-convertible debentures to finance the remaining debt, people familiar with the development said on condition of anonymity.
For the overseas debt, it will be paying 500 basis points over the London interbank offered rate. One basis point is one-hundredth of a percentage point.
The overseas loan was borrowed through UK-based SPV TML Holding and is guaranteed by Tata Motors.
The interest Tata Motors agreed to pay is at least double the margin it was paying on a $3 billion bridge loan it used to buy Jaguar and Land Rover last year, according to data compiled by Bloomberg.
The auto maker has already repaid about $2 billion of the bridge loan. Tata Motors sold Rs4,200 crore of bonds last week after raising cash from a share sale and offering term deposits to the public.
Tata spokesman Debasis Ray declined to comment on the loan.
Bloomberg contributed to this story.