India’s Tata Motors will seek to raise up to 75 billion rupees ($1.2 billion) in a rights offer that seeks to gather the necessary funds to continue investments at its namesake brand and British subsidiary Jaguar Land Rover.
The country’s largest automaker has announced it predicts that spending will reach around 40 billion rupees per year for its India business in the next two or three years, while up to 3.7 billion British pounds ($5.5 billion) would be used annually for its UK-based Jaguar Land Rover division for activities of product development and business expansion. A recent exchange filing showed the company intends to offer six shares for every 109 held at 450 rupees apiece, at a 15 percent discount from the company’s share closing price seen Tuesday. The owners of the so-called differential voting rights will have the same proportion for 271 rupees apiece, with the offerings used to partially fund the intended investments.
Tata’s local Indian unit has registered losses in six of the last nine quarters as the internal demand had shrunk for the automaker’s trucks and passenger cars. According to comments made last month by C. Ramakrishnan, chief financial officer, the company would present two new passenger vehicles each year by 2021.
Jaguar Land Rover meanwhile has a strategy that calls for the introduction of at least 40 new products – including body variants and powertrain mixes – over the next half decade. The British manufacturer also wants to lift manufacturing capacity at home, while also expanding production operations in China, the world’s largest auto market.
Via Automotive News Europe