promoters-buy-majority-of-tata-motors-rights-issue

Promoters buy majority of Tata Motors rights issue

Minority shareholders shun the issue, while JM Financial backs out of its underwriting commitments on one of the two tranches and takes up only a small portion of the 67.8% it had agreed to cover.
Indian car manufacturer Tata Motors has raised the Rs41.458 billion $838 million it set out to do through a dual-tranche rights issue to existing shareholders, although the sharp fall in the share price during the offer period meant very few minority shareholders chose to participate. The proceeds will be used to partially pre-pay a $3 billion bridge loan taken up in connection with TataÆs acquisition of the Jaguar and Land Rover brands from Ford earlier this year.

To top off the lacklustre interest from minority shareholders, JM Financial Consultants also backed out of an earlier agreement to underwrite up to 67.8% of one of the tranches, which consisted of reduced voting shares, and after renegotiating...
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