Tata raises $750 mln, will repay takeover debt
NEW DELHI: India's top vehicle maker Tata Motors raised 750 million dollars on Friday from investors and said it would use the funds to repay debt from the purchase of British car icons Jaguar and Land Rover.
Helped by growing strong demand for emerging market securities, Tata Motors said it won an enthusiastic response to its sale of global depositary shares (GDRs) and convertible bonds.
The company said in a statement it boosted the size of its offering after meeting its initial fundraising target of 600 million dollars within one hour.
Tata Motors Vice Chairman Ravi Kant called the success of the sale "a significant milestone" for the company that was a "reaffirmation of investor confidence in the automobile sector."
"Tata Motors intends to use the net proceeds from this offering for repayment of debt incurred in connection with the acquisition of Jaguar Land Rover," the company said.
The rest would be used for other purposes such as capital spending, Tata said.
Tata Motors bought Jaguar and Land Rover from ailing Ford Motor Co. last year for 2.3 billion dollars.
But sales of the luxury cars have been badly hit by the global economic slump.
The company has already repaid back much of the three-billion-dollar bridge loan it had taken out to finance the purchase of the two premium car models.