Tatas scrap asset sale plan to shore up funds
Tata Sons Ltd has ruled out any immediate plans to sell assets to shore up its finances because of the coronavirus pandemic that has hammered Indian companies.
The holding company of Tata group, in a statement on Friday, said it is well-capitalised and prepared to take on the challenges posed by the countrywide lockdown since March 25, which has brought economic activity to a near- standstill.
“Tata Sons is in a strong financial position with adequate cash flows to support group companies and new growth initiatives. Tata Sons is not looking to monetise its investments to raise capital,” chairman N. Chandrasekaran, said in the statement after a board meeting of the company on Friday, which officials described as a routine meeting to assess the impact of the pandemic on group companies.
Group officials who declined to be named said pressing issues concerning the group were discussed but no decisions were taken pertaining to group firms, including Tata Motors Ltd that has been struggling. The automotive company’s luxury unit Jaguar Land Rover (JLR) is in talks with the UK government for an estimated £1 billion aid package to help it tide over the turmoil.
It said on Friday it has borrowed £560 million from five Chinese banks to ease the financial strain on the company.
Likewise, Tata Steel has struggled to maintain production levels, with capacity utilisation at its mills falling to less than half in the first month of the lockdown and is seeking a government bailout for its European operations. The group also co-owns full service carrier Vistara, which has seen operations grind to a halt and is expected to report a sharp drop in revenue and profitability.
Tanya Thomas, Amit Panday and Rhik Kundu contributed to this story.