Tata offers 11% on deposits to fund Jaguar buy

Tata offers 11% on deposits to fund Jaguar buy

Mumbai: Tata Motors Ltd, the maker of Jaguar and Land Rover vehicles, will borrow from the public for the first time in 13 years as the credit crunch limits its ability to refinance loans used to acquire the luxury brands in June.

Tata Motors will pay as much as 11% annual interest on three-year deposits from the public, spokesman Debasis Ray said in a phone interview on Monday.

A government bond with a similar maturity offers a 6.97% yield.

The Mumbai-based company needs money to replace a $3 billion (Rs15,030 crore) bridge loan it used to fund the $2.4 billion purchase of UK-based luxury units of Ford Motor Co. A global credit crunch after the bankruptcy of Lehman Brothers Holdings Inc. has cut availability of finance for companies amid a worldwide recession.