Agencies, Aug 26: Tata Motors has indefinitely deferred a planned fund raise of up to $1.5 billion in foreign currency loans after failing to garner sufficient interest from potential lenders, two people directly aware of the development said media, requesting anonymity.
The funds were to be raised by a Singapore-based entity of Tata Motors to refinance existing loans of Tata Motors as well as its wholly-owned unit, UK-based Jaguar Land Rover Automotive Plc (JLR), said the people cited above.
Tata Motors was in talks with several foreign banks since the start of this year to avail the syndicated loan facility, the people said. “The loan was to be raised by August this year,” said the first person cited above. “Tata Motors has now decided to pursue fund raise options with domestic lenders,” the person said. Another source said, “Unless they are able to sell the existing loans, the lenders may not be able to take more exposure to Tata Motors.”
“Tata Motors group has a strong balance sheet,” a company spokesperson said. “As of last financial year-end, our net worth was Rs 60,000 crore. Our automotive business has a net debt of Rs 28,700 crore and we generate an EBITDA of Rs 27,000 crore, giving us a comfortable net auto debt-to-EBITDA ratio of 1.05. Our debt has maturities that are well spread out over the next seven years and we have well-diversified sources of funding,” the spokesperson added, “Operationally, in Q1 FY20, JLR has reduced its cash outflows by almost one billion pounds compared to the previous year and we expect this trend to continue in the coming months too. We tap markets regularly for our funding needs depending on prevailing market conditions.”