Tata Motors Reaches US$600 Million Target in Less Than An Hour
Oct. 12 – Top Indian auto manufacturer, Tata Motors, decision to offer global depository issues and convertible bonds to help pay for debt incurred from purchasing Jaguar and Land Rover was met with enthusiasm when its initial fund-raising target of US$600 million was reached in less than an hour.
Due to the positive response, the company had to raise its initial offering by 25 percent. Tata Motors was able to raise a total of US$750 million. Ravi Kant, vice-chairman of Tata Motors, was quoted by The Economic Times as saying that the successful fund raising was a reaffirmation of investor confidence in the global auto sector, and bore testimony to the trust reposed in the long-term outlook for Tata Motors.
The global drop in auto demand has made it harder for the company to pay off the US$3billion bridge loan it took in 2008 to buy Jaguar and Land Rover. The company’s offering is also set to be listed on the Luxembourg Stock Exchange and is expected to settle on October 15th.
Tata Motors gained new investors from the offering including Fidelity, ABP, Och-Ziff, and Farallon, while Credit Suisse, Citigroup and JP Morgan.