Tata Motors is keeping mum on whether or not it will relinquish a stake in its financing arm, although it admitted looking for “opportunites” to strengthen its gearing position.
The Indian giant was responding to speculation it could sell up to 49% of its share in Tata Motors Finance following disposal of a stake in Tata Steel last year to pay down debt for its Jaguar Land Rover purchase from Ford.
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“During the last eight or nine months or even a year, there have been reports off and on that we will be divesting a stake in this or that company or raising capital,” a Tata spokesman in Mumbai told just-auto.
“Tata Motors has publicly said it is committed to deleveraging the company through divestment in capital raising at an appropriate time. Specifics will be announced as and when we finalise on a case by case basis.”
The spokesman added Tata Motors was seeking to deleverage in order to improve its debt equity ratio, although he stressed it would be “incorrect to make predictions” on any details.
Speculation has swirled around the Indian giant that it was looking to raise cash but the automaker today was keen to play down any suggestion it was “hard up.”
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By GlobalDataIt stressed it had paid back the $US3bn bridging loan taken out to acquire Jaguar Land Rover, although it conceded it had been engaged in raising capital “through different means” to repay that loan in full.
The automaker was playing its cards close to its chest after reports fellow Tata group company Tata AutoComp Systems had sold a circa 6% stake in its joint venture – with Spain’s Gestamp Servicios – Automotive Stampings and Assemblies for INR35.8m.
“Tata AutoComp is an associate company and we have some stake but we do not speak on these things,” the Tata spokesman added.
As of end-December, Tata AutoComp had a 43.86% stake in Automotive Stampings with Gestamp owning 37.5%, reports said.
“The company would like to have a strong gearing,” added the Tata spokesman. “If there are opportunities the company will deleverage itself. Is Tata hard up? No Tata is not hard up, not at all.”
