Tata to sign JLR deal next week: media report
Tata Motors, the auto arm of Tata Group, is expected to ink the deal for the $2.3 billion acquisition of British luxury brands Jaguar and Land Rover by next week, a media report said today.autos Updated: May 29, 2008 23:50 IST
Diversified Indian conglomerate Tata is expected to ink the deal for the 2.3 billion dollar acquisition of British luxury brands Jaguar and Land Rover by next week, a media report said on Thursday.
According to the Birmingham Post newspaper, Tata executives including the managing director of Tata Motors Ravi Kant are set to travel to the Midlands for a joint signing ceremony with bosses of US car maker Ford, the current owner of JLR.
"The signing is imminent," the newspaper said in an article published in its online edition.
On Wednesday, Ravi Kant had said the company is in the process of completing the Jaguar and Land Rover deal in the current quarter.
Tata Motors, the auto arm of Tata Group had announced in March that it has entered into a definitive agreement with Ford to acquire Jaguar and Land Rover.
In the report, Birmingham Post said the signing ceremony is likely to be a low key affair without any "razzmatazz" normally associated with such massive deals.
"There has been speculation that Tata, India's largest vehicle maker, could be worried at what response it might get to a high profile ceremony, lauding the takeover of an iconic British asset by a foreign group, at a time of global credit crunch and economic slowdown," the newspaper noted.
Tata Motors on Wednesday announced a consolidated net profit of Rs 2,167.70 crore for the year ended March 31, a marginal decline compared to the previous fiscal. It had a consolidated net profit of Rs 2,169.99 crore in 2006-07.
While announcing the results, the firm said it plans to raise up to Rs 9,770 crore through a host of fund raising initiatives, primarily to finance the buyout of Jaguar and Land Rover.
Pointing out that Tata has said the jobs of people employed at JLR would be safe, Birmingham Post added although those indirectly involved in the manufacture of the vehicles, the component suppliers are still waiting to find out how they stand with their new customers.
"Quietly, most think it will be business as usual but they are being as accommodating as possible with the Indian company to show they can offer it good value," the report added.
The company plans to raise about Rs 7,200 crore through three simultaneous but separate rights issues, including an issue of equity shares of up to Rs 2,200 crore.
Tata Motors would raise about Rs 2,000 crore through a rights issue of 'A' category equity shares carrying differential voting rights of one vote for every 10 'A' equity shares and another Rs 3,000 crore from a rights issue of five-year 0.5 per cent Convertible Preference Shares (CCPs).
The CCPs would be optionally convertible into 'A' equity shares after three years but before five years from the date of allotment.
On completion of the three rights issues, Tata Motors plans to raise about $ 500-600 million (approximately Rs 2,569 crore) through issue of securities in foreign markets.