Jaguar parent looks to cut debt

JAGUAR Land Rover parent Tata Motors has announced plans to raise more than £660m in order to expand its operation and reduce the debt it has accumulated purchasing the luxury brands.

The carmaker, which employs around 2,000 workers at Halewood, Merseyside, will issue new shares, bonds and other investment opportunities in order to raise the funds.

In a statement, the company said its board had decided to ask for shareholders’ approval to raise 47bn rupees ($1bn) through a combination of “ordinary shares, ‘A’ ordinary shares, convertible bonds, debentures, warrants or other equity linked instruments in the domestic and/or international markets in one or more tranches”.

“The above fund raising proposals will be for meeting the company’s growth plans as well as for reducing the debt on its balance sheet.

“The timing and structure of the issues will be decided depending upon market conditions post shareholders’ and other approvals,” said the statement.

Since acquiring the two brands from Ford in 2008 for a combined £1.15bn, Tata is thought to have acquired net debt of around £2.5bn, although this is down considerably on last year.

Its faith in the British brands has been repaid since acquisition and sales of the two marques have been rising steadily – Land Rover recently enjoying its best month ever.