New Delhi
Last week, Tata Motors’ board had approved raising of Rs 6,500 cr via preferential allotment of securities to Tata Sons. In a notice seeking shareholders’ nod, Tata Motors said as on September 30, 2019 Tata Sons held 35.3 pc stake in the company.
Explaining the reasons for raising funds from its promoters, Tata Motors said the domestic business has been hit by slowdown which “significantly impacted sales volumes, profitability and cash flows and increased the net debt to unsustainable levels.” Tata Motors has a net debt of Rs 50,000 cr out of which Tata Motors Ltd alone account for Rs 20,000 cr.
“The company remains optimistic on medium to long-term growth in the Indian market, but the near-term demand situation is fluid and the slowdown has come at an inopportune time when capital expenditure intensity will remain high due to continued focus on exciting products and BS VI transition,” Tata Motors said. Also, the company said its British arm Jaguar Land Rover continues to face risk from external factors despite improvement in performance and recovery in China.
JLR continues to face risks from a slowing global economy, Brexit related uncertainties, trade wars and disruptions from ACES (autonomous connected electric shared).
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