Tata Motors Ltd is in deep talks with nine banks, including Standard Chartered, Citigroup, State Bank of India and JP Morgan Chase & Co., to raise $3 billions to fund its ongoing deal with Ford to takeover Jaguar and Land Rover.
It is worthwhile to inform that Tata’s shares have fallen upto 11% since Tata came out as the preferred bidder for the luxury brands. Tata Motors is also supposed to have approached Bank of Tokyo, Calyon and ING Group for rising of loan.
In the face of such an important deal, industry sources think Tata has bitten more than it could possibly chew. Arvind Jain of Religare Securities is of the view: “Tata won’t be able to get outsourcing from India and is unlikely to be able to introduce Jaguar or Land Rover to the Indian market at least in the next two to three years. On top of that, pension liabilities from the acquisition could be huge.”