Tata further details takeover plans
Indian automaker Tata Motors announced its yearly results this week and further details on how it plans to takeover Jaguar and Land Rover. Mehul Srivastava reports the impact of Tata's news on shares.
India's Tata Steel (Sajjad Hussain, AFP/Getty Images)
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TEXT OF STORY
Renita Jablonski: Tata Motors, the Indian company that's buying out Jaguar and Land Rover from Ford, announced its yearly results this week. It also gave a little more detail on how it would complete the takeover of the two iconic brands. Mehul Srivastava reports from New Delhi.
Mehul Srivastava: Tata Motors had a good year as far as earnings are concerned, banking nearly $478 million and holding on to its position as India's third-largest car manufacturer.
But now comes the hard part -- Tata needs to pay off the $2.3 billion bill for Jaguar and Land Rover, and its stock price and bond rating are taking a hit as it raises that money. The company said this week that it will liquidate up to 30 percent of its equity to raise most of that cash.
Until that money's in the bank, Tata Motors will be paying interest to 15 different lenders that provided billions of dollars in temporary loans to help close the deal. The announcement dragged Tata's shares down by as much as 7 percent.
Tata Motors didn't reveal much else about how Jaguar and Land Rover were doing -- the companies are not yet fully consolidated. Tata did tell the unions at both companies that for now, it would continue to manufacture cars in the U.K., guaranteeing a little short-term job security for the ex-ford employees.
In New Delhi, this is Mehul Srivastava for Marketplace.
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