*Tata Motors Ltd* plans to partly exit from its JV - *Tata Cummins* by selling 24% stake to partner *Cummins Inc*.
Tata Motors aims to raise Rs500 cr from the stake sale. The move is a part of Tata Motor's plan to divest non- core assets to reduce debt which stands at Rs 23,100 cr as of December 2009. Transaction Note *Tata Cummins Limited* is a 50:50 JV which started commercial production in 1996 to manufacture low emission advanced diesel engines for Tata Motors’ captive consumption. Tata Motors was the largest customer for Tata Cummins, but over the past few months, Tata Motors’ dependence on the engines maker, has been gradually falling. Tata Cummins has begun supplies of its advanced diesel engines to AMW, Force-Man. Tata Motors has taking various measures to reduce debt accumulated after the acquisition of Jaguar and Land Rover. Last year, Tata Motors Ltd had raised $840 mn through issue of secured NCDs .The funds were raised to partly repay the $3 bn bridge facility taken for JLR acquisition. Last month, Tata Motors had sold a further 20% stake in *Telco Construction Equipment Company Limited* to *Hitachi Construction Machinery Co. Ltd *for Rs 1159 cr. Prior to that, the company offered early conversion of notes into stock through an auction to help reduce the debt on its balance sheet. Tata Motors retired $345 mn debt by offering its foreign currency bondholders an option to convert earlier at a reduced conversion price. The company has 11.76 bn yen-denominated ($130.2 mn) notes and $300 mn dollar-denominated notes due for conversion respectively in March and April 2011. It has been reducing its debt, including through sale of shares in group firms. In 2008-09, when commercial vehicle sales were under pressure, Tata Cummins’ revenues too slipped. However, now things are starting to look up. Commercial vehicle sales for the April 2009-February 2010 grew 35% to 4.64 lakh units. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
