IndiaPost.com - Jaguar, Rover land in Tata pocket

LONDON: Creating history, India's top corporate Tatas has acquired luxury auto brands -- Jaguar and Land Rover -- from Ford Motor for 2.3 billion dollars, stamping their authority as a takeover tycoon.

Beating compatriot Mahindra and Mahindra for the prestigious brands, just a year after acquiring steel giant Corus for 12.1 billion dollar, Tatas announced the deal they signed with Ford, which on its part would chip in 600 million dollar towards JLR's pension plan.

The deal was announced after protracted negotiations that Tatas had with JLR union workers. "We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business," Group Chairman Ratan Tata said after making the deal public. "We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact," he said.

Later, addressing a teleconference, Tata Motors Managing Director Ravi Kant said the company would retain the existing management of Jaguar and Land Rover and was looking forward to work with them. "In fact, Mr Ratan Tata had a meeting with the top management of the two companies and it was a frank and productive discussion. Geoff Polites, the CEO of Jaguar and Land Rover has agreed to stay on," Kant said.

Expressing confidence of having a fruitful relationship with the employees union of the Jaguar and Land Rover, he said: "We have had two interactions which have been very good." On the car financing also, Kant said Ford, which normally does not finance vehicles that are not its own, have agreed to do so for J-LR for the transition period of 12 months.

"In the meantime, we are in discussion with various people for tie-ups in various geographies of the world (for financing). Twelve months is quite sufficient," he said.

Japanese loan

NEW YORK: Reports here say two banks from Japan will provide funding to the tune of 80 billion Japanese Yen (805 million dollar) to India's Tata Motors for its 2.30-billion dollar acquisition of British marquees Jaguar and Land Rover.

"Bank of Tokyo-Mitsubishi UFJ and Mizhuo Corporate Bank will provide nearly 80 billion Japanese Yen (805 million dollars) to Tata Motors Ltd as a part of a consortium to help finance its recent purchase of the Jaguar and Land Rover units of Ford...," the Wall Street Journal said in an article published in its online edition.

Tata Motors, after announcing the agreement, had said the deal would be funded through a mix of existing cash reserves and new debts.

"We had raised three billion dollars as bridge loan for a period of 15 months, which would be refinanced in the long- term through equity, debt in appropriate measure and also by divesting Tata Motors' investment in its subsidiaries," Tata Motors' CFO C Ramakrishnan said. Besides, a Tata spokesperson said, "We already have committed financing from our banks which along with our existing cash reserves is sufficient."

He, however, declined to comment on the details of disinvestment in the subsidiaries. Tata Motors had also recently announced that its Board had approved raising of Rs 4,000 crore (about one billion dollar) from either overseas or domestic markets through issuance of securities.