Tata Motors to raise funds to repay debt

Tata Motors to raise funds to repay debt
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First Published: Tue, Sep 02 2008. 04 21 AM IST
Updated: Wed, Sep 03 2008. 09 35 AM IST
New Delhi: The country’s top auto maker Tata Motors Ltd said on Tuesday it would raise Rs4,150 crore through two rights issues that are expected to open around the end of September.
Tata Motors said it would offer one ordinary share at Rs340 for every six held to raise Rs2,190 crore. It also said it would offer one so-called “A” share, which has different voting and dividend rights, for every six shares held, at a price of Rs305 to raise Rs1,960 crore.
The firm said the proceeds would be used to make an early repayment on some of the short-term funding of its $2.3 billion (Rs10,189 crore today) acquisition of Jaguar and Land Rover from Ford Motor Co.
Tata Motors’ shares, which have fallen more than 30% since 28 May when the rights issue was announced, fell 1.82% to Rs429.85 on the Bombay Stock Exchange (BSE) on Tuesday, even as the exchange’s benchmark Sensex index gained 3.8% to end at 15,049.86 points.
The company, which plans to launch in October the Tata Nano, billed as the world’s cheapest car, had planned three rights issues to raise a total of Rs7,200 crore, but scrapped a part of the offering last month due to souring capital markets. It has since said it would sell some investments in phases, preferably to group firms to make up for the shortfall.
Funds raised through share sales by firms in India in the first six months of 2008 fell 66% from a year earlier to $5.85 billion, hurt by falling stock markets, Thomson Reuters data showed.
The BSE Sensex is down more than a quarter this year.
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First Published: Tue, Sep 02 2008. 04 21 AM IST