Tata Motors drops Rs 3,000-crore issue

Tata Motors, which was planning to raise Rs 7,200 crore through three simultaneous but unlinked securities by a rights issue to fund the Jaguar-Land Rover acquisition, has decided to cut down the issue and instead raise funds through divestments.

Taking into account the 8220;current situation in the capital market and the change in the level of prices in the stock markets8221;, it has decided to drop the issue of 0.5 per cent five-year convertible preference shares of a total amount of about Rs 3,000 crore. This share would have been convertible into 8216;A8217; ordinary shares at any time after 3 years but before 5 years from the date of allotment.In place of the issue of convertible preference shares, it has now proposed to raise the required resources by monetizing a part of the company8217;s investments through a phased divestment of certain investments preferably as inter-group sales wherever feasible at prevailing market prices over the next 6 to 8 months. 8220;The funds released

from such future divestments together with those already sold during the current financial year, will form part of the resources to be raised for repaying the bridging loan taken for the Jaguar-Land Rover acquisition,8221; it said.