Filed under: Jaguar, Land Rover, Earnings/Financials, Tata
Tata takes out $3 billion loan to buy Jaguar and Land Rover
As Tata's acquisition of Jaguar and Land Rover inches closer to completion, an anonymous source inside the Indian automaker has revealed that the company has secured a $3 billion loan in order to finally finance the take-over. The loan is reported to come from the banks of Citigroup and JPMorgan, although both financial firms as well as Tata have refused to comment on the reports.
Additional sources of funding for Tata could come from domestic and foreign debt markets, from which Tata could raise an additional $4 billion. That would also come in handy for investing in the production of the upcoming Nano, or even the rumored purchase of shares in Ferrari. Financial services analyst Standard & Poor's, however, is currently reviewing Tata's credit rating, which stands at a high BB+ level due to the increased debt the carmaker will inevitably incur from the acquisition of these two luxury brands from Ford.
[Source: Automotive News – sub. req'd]
Reader Comments (Page 1 of 2)
Mr. Oak 4:47PM (3/18/2008)
Hey, I work for one of those banks.
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chivyas 5:29PM (3/18/2008)
your point being??
Westside T.O. 9:23PM (3/18/2008)
Ass...
Colin Smith 5:57PM (3/18/2008)
I see, they can't afford it, so they are going to borrow money on Wall Street.
I'm enjoying this...
Reply
VP 6:13PM (3/18/2008)
If you graduated college, i am pretty sure now that you slept through ECON 101. Do you think any company is going to have cash resources of over $3 billion? Did you ever buy a car or a house with cash?
Why do you think Chase gave Tata a loan for all those billions? Because they have confidence in tata's ability to pay it back. By the way you will enjoy Indian companies buying a lot more of your "icons". This is just the beginning.
dejal 7:03PM (3/18/2008)
"Did you ever buy a car or a house with cash?"
Yup.
hashiryu 8:19PM (3/18/2008)
Yeah, you take a loan to buy a house (an appreciating asset) and you buy a car cash (depreciating asset).
Reader 10:19PM (3/18/2008)
Even if you find his analogy flawed his point still stands 100%. A company that would keep 3 billion sitting around would fall into the ground, fast. All cash does is depreciate with inflation when it could be invested in capital. The fact they got the lone isn't because Tata is a poor company, it's actually quite the opposite. Tell me how it goes when you ask a bank for a $3,000,000,000 loan.
cam427r 1:10AM (3/19/2008)
No companies with that kind of cash? ExxonMobil and British Petroleum both have over $8 billion in cash each.
jonathan 8:53AM (3/28/2008)
Yes you can enjoy. Unlike the CEO of GM who took pay of 5.8 million when his company lost 32 billion the Tatas know how to get the job done.
They also put down a lot of their own money and are not buying it with zero down .
This is not the subprime mortage issue or the private equity issue that we have in the US. These guys put their money where their mouth is and are willing to work hard for that.
Zane 6:48PM (3/18/2008)
@VP: While I agree with you for the most part, your direct attack on Colin tells me you skipped all your classes on basic communication skills.
Oh, and I know hundreds of car buyers who pay the entire amount up front. Your comparison makes no sense.
Colin Smith 6:33PM (3/18/2008)
I detect anger,
And yes, I did buy a car without a loan.
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Vik 6:49PM (3/18/2008)
Colin Smith- and I'm detecting someone who's not-so-slyly picking at low-hanging fruit and avoiding the real questions posed, so I'll repeat them for VP:
1.Do you think any company is going to have cash resources of over $3 billion?
2. Why do you think Chase gave Tata a loan for all those billions?
How about you just admit that your post was ignorant garbage, you've never taken Econ 101, and you wish you could find the delete button? That would be a great start. Otherwise, you're already in deep sh** and you're only gonna get your face rubbed in it.
Colin Smith 7:04PM (3/18/2008)
Stll detecting anger...
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Vik 7:09PM (3/18/2008)
Still detecting avoidance of the questions, even though they were enumerated and clearly spelled out this time. Hmm..I wonder why you can't answer simple questions? Oh wait, no I don't.
Mr. Blake 10:03PM (3/20/2008)
douche.
Jay 7:35PM (3/18/2008)
Vik
Yes some companies do have over $3B in cash reserves
Toyota are reported to have at least $15B in cash reserves
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hashiryu 8:17PM (3/18/2008)
How many car companies have as much money as Toyota?
Vik 8:32PM (3/18/2008)
Jay- great response giving me an example of Toyota, the car company with the greatest in cahs reserves on the planet. The question was rhetorical, in that it is not unreasonable that they took out such a loan. This is also why I asked the 2nd question, which you (not surprisingly) chose not to answer.
mario 8:49PM (3/18/2008)
Who buys houses with cash? i can understand paying cash for a used car as did I for my xb ($13k) but who really can afford to pay $30-40k outright for cars and houses that are easily 200-300 thousands dollars of value, other than lawyers &docs ???
I don't think colin smith has ever gone to college nor bought a car before.
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