Tata will be taking a one-year bridge loan from Citigroup & JPMorgan to fund the purchase of Jaguar & Land Rover from Ford. The three-billion dollars will also help finance the costs associated with launching the Nano, soon to be the most affordable car in the world.
The purchase of Jaguar & Land Rover may yield some unappealing side effects though. Standard & Poor may downgrade Tata from its current BB+ rating due to the increased debt.
The loan agreement is still in the early stages, but the sale of Jaguar & Land Rover should be complete by month’s end.
Source: Automotive News (Subscribtion Required)