Tata Motors To Axe Indebtedness !

India's largest commercial vehicle manufacturer has decided to raise Rs. 4700 crore in order to reduce the debt. The money raising is to be done in both Indian and international markets, through a combination of convertible bonds, equity, debentures and warrants to reduce debt and fund expansion. According to experts, a considerable amount of money will act as a capex, to back up long term improvements in the company's future ventures.

While Tata Motors are among other competitive bidders, in which they boldly stepped ahead and brought Jaguar and Land Rover brands to the country, it had a net debt of Rs. 18,800 crore on its books during March 2010 and the major portion of this huge amount is due to the .3 billion acquisition of marquee British brands JLR in 2008 from the American giant, Ford Motors.

Tata Motors had taken a -billion bridge loan to finance the acquisition and meet its working capital requirement. The company has also raised 0 million by selling a 20% stake in group firm Telcon, to its joint venture partner Hitachi Construction Machinery. Since, the demand for JLR vehicles are confident inspiring, Tata Motors need money to spend around £600 million in this financial year for expansion of Jaguar and Land Rover brands.

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