Tata Motors sells Tata Steel holding to fund Jaguar deal
Tata Motors has sold over one crore shares in Tata Steel to Tata Sons, the holding company of all Tata group firms. Indulal PM reports.autos Updated: Sep 25, 2008 20:57 IST
Tata Motors has sold over one crore shares in Tata Steel to Tata Sons, the holding company of all Tata group firms.
The shares were sold for a total value of Rs 486 crore. The amount will be used to fund the Jaguar-Land Rover acquisition. The deal will help Tata Sons to raise its stake in Tata Steel.
The shares were sold in two tranches of 50 lakh shares at Rs 485.70 and Rs 485.40, respectively, on the Bombay Stock Exchange, according to the bulk deals data provided by the exchange.
Tata Sons has 27.9% stake in Tata Steel. With the current stake sale, Tata Sons’ stake will go up to 29%.
“Tata Motors intends to monetise a part of the company’s investments through a phased divestment of certain investments preferably as inter-group sales wherever feasible at prevailing market prices,” a Tata Motors spokesperson said. “The funds released will form part of the resources to be raised for repaying the bridging loan taken for the Jaguar-Land
Earlier this year, Tata Motors bought Jaguar and Land Rover brands for $2.3 billion. The company has taken bridge loans to the tune of $3 billion to part finance the acquisition as well as future capital expenditure requirements. Tata Motors have also planned a Rs 4,200 crore rights issue to finance the acquisition.
“This would help Tata Motors to raise funds in a low liquidity and high interest rate scenario,” said Hitesh Agrawal, head of research, Angel Broking. “This will also enable Tata Sons to increase stake in the group company.”