Tata Motors to raise $935 mn
Tata Motors Ltd, the country’s top vehicle maker, says that it would raise $935 million through two rights issues that are expected to open around the end of September.autos Updated: Sep 02, 2008 21:00 IST
Tata Motors Ltd, the country’s top vehicle maker, said on Tuesday it would raise $935 million through two rights issues that are expected to open around the end of September.
Tata Motors said the proceeds would be used to make an early repayment on some of the short-term funding of its $2.3 billion acquisition of Jaguar and Land Rover from Ford Motor Co. The $3 billion bridge loan expires in June 2009.
The company, which plans to launch the Nano, billed as the world’s cheapest car, around October, also said it planned to go ahead with previously announced plans to raise $500-600 million overseas by selling equity or equity-related instruments.
The rights issues would result in equity dilution of about 33 per cent, NA Soonawala, director of Tata Motors and vice-chairman of holding firm Tata Sons, said at a news conference.
The company said it would offer one ordinary share at Rs 340 for every six held. It also said it would offer one ‘A’ ordinary share, which has different voting and dividend rights, for every six shares held, at a price of Rs 305.
Tata Motors shares, which have slid 32.3 per cent since May 28 when the rights issue was announced, ended 1.8 per cent down at 429.85 on the Bombay Stock Exchange, as investors were concerned about the equity dilution.
A class ‘A’ shareholder will get one vote for every 10 'A' shares held, and will receive a dividend 5 percentage points higher than ordinary shares. “A large number of investors are not particularly interested in voting rights. Therefore we can give them something attractive,” he said.