Indian automaker Tata has moved one step closer to purchasing Jaguar and Land Rover. Reuters reports that the Indian automaker has secured a $3b one-year bridge loan from Citigroup and JPMorgan. The usual "sources familiar with the deal" say the loan is to "help finance a potential purchase" of the luxury brands from Ford. The principals declined to comment, but media reports from India say Tata is expected to agree to the purchase at the end of the month. (And Francisco Franco is still dead.) Tata may still balk– especially as Standard & Poors is reviewing Tata for a possible downgrade in the light of the potential increase in the company's debt load. If the sale goes through and FoMoCo's cash flow goes critical, Volvo and their 33.9 percent share of Mazda could be next.
8 Comments on “Tata Borrows $3b for Jaguar/Land Rover Purchase...”
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What an incredible bargain for TATA.
Not as much as Bear Stern for JPMorgan, though.
It reamins to be seen how solven jaguar and LR are, and how much brand equity they retain.
I believe only 2-3 small hits and jaguar will be back on track. The brand is so iconic that buyers could even forgive a lack of reliability, as long as the cars are sensuous, exciting, and above all exclusive, i.e. different from the German trinity+Lexus.
Hmmm… is the Fed involved too?
I’m puzzled by how two essentially upscale brands will help a bottom basement car manufacturer enter foriegn markets? If you think that Ford designed, decontented, Jaguars were low rent wait until you see a Jaguar Nano.
I also have to wonder why Ford would sell its stake in Mazda, which I believe is the only Ford brand that actually made money and increased sales last year. I guess I missed it, but I thought Ford owned 50% or 51% of Mazda not 33.9%.
up is down and down is up.. sounds like the end of the world ..
Picture this:
A super basic de-contented, small diesel ,4 wheel drive, somewhat Nanoish Land Rover w/ flat paint. Something that the US should have had all along.
I also thought Ford had 51% of Mazda.
While I understand the need for cash leading to the Jag and LR sales, I think Ford would be uterly stupid to dump Mazda (and to a degree, Volvo). Both have significant positives in the design arena, with the Mazda6 being the base for the Fusion and Volvo having heavy input in the new Taurus. Although neither have been super stars, they’ve gone a long way to giving design and reliability credibility to FoMoCo. The Edge and CX-9 synergy is another bright spot. Frankly, I think Ford should go a step further and bill Mazda as their “performance” brand (as Pontiac is to Chevy).
Lumbergh21 I guess I missed it, but I thought Ford owned 50% or 51% of Mazda not 33.9%
Ford owns controlling interest in Mazda as the largest stockholder, but the not the majority interest.