Tata Motors has started talking to private equity funds to sell stake in as many as six of its unlisted entities to finance its acquisition of Jaguar and Land Rover. The biggest of the lot is Tata Daewoo Commercial Vehicle Company, reports Economic Times. Others include HV Excels, HV Transmissions, Tata Motors Finance, Tata Technologies and Telco Construction Equipment (Telcon).
Tata Motors plans to raise upto Rs 3,000 crore ($750 million) from these stake sales and selling shares in listed entities, in addition to the Rs 4,200 crore ($1.05 billion) it plans to raise through the rights issue. It plans to sell off 20-25% stake in these entities.
Yesterday, Tata Motors sold 1% stake in Tata Steel for Rs 485 crore. The shares were sold in two tranches of 50 lakh shares each at Rs 485.70 and Rs 485.40, respectively, on the BSE. The stake was sold to the group company, Tata Sons, whose stake would be now around 29% in Tata Steel.
This stake sale is likely to arouse a lot of interest from world’s biggest private equity players. Another Tata Group entity, Tata Steel Global Holding Pte Ltd, the subsidiary that owns the international steel and mining assets of Tata Steel, is also reported to be looking to raise PE funds. It is reportedly in the market to raise at least $1 billion.
Earlier this month Tata motors announced its rights issue. The ordinary rights issue is priced at Rs 340 a share while the issue offering shares with lower voting rights is pegged at Rs 305 per share. Tata Motors acquired Jaguar and Land Rover in March this year for $2.3 billion. To fund this acquisitions, Tata took bridge loans of $3 billion.