NEW DELHI - India's Tata Motors, expected to clinch a deal soon to buy British luxury car brands Jaguar and Land Rover, said Tuesday it would raise up to one billion dollars to fund its expansion drive.
The announcement came as ailing US carmaker Ford was in talks with Tata Motors to sell the Jaguar and Land Rover marques in a deal analysts say would give the Indian firm a major technological boost.
The board of directors of Tata Motors "has in principle approved, subject to other approvals as may be required, raising of additional long-term resources up to 40 billion rupees (one billion dollars)," a company statement said.
"The company has major growth plans for expanding its position in the domestic and global markets in both the commercial vehicle and passenger vehicle business," company spokesman Debasis Ray said in the statement.
"This will be achieved by upgrading and enhancing the company's product portfolio, expanding manufacturing facilities in India and strategic acquisitions/alliances in India and abroad," he said.
Ford named Tata as the preferred bidder for the exclusive Jaguar and Land Rover marques in January.
"The acquisition opportunities will have to be financed upfront," Ray said. The funds "are being raised to part-finance overall funding requirements to meet some of the strategic plans."
The money mould be raised by issuing "appropriate securities in the foreign and/or domestic market in one or more tranches on terms to be decided" by the company in due course, the company statement said.
Tata Motors, part of the sprawling tea-to-steel Tata Group, is India's top-ranked truck and bus manufacturer and the third-placed carmaker.
Ford and Tata have declined to comment on media reports that the cost of the Jaguar and Land Rover purchase would be about two billion dollars.
Last week, British media quoted union officials as saying Tata could sign a memorandum of understanding to buy Jaguar and Land Rover within weeks.
pmc/sas/skj
03/11/2008 12:22 GMT