After the recent agitation at its Nano project in Singur, West Bengal, auto major Tata Motors may now have to grapple with turning around its recently acquired Jaguar and Land Rover (JLR) operations. In its prospectus to shareholders for the planned rights issue, Tata Motors said on Tuesday that the two iconic UK luxury brands it bought earlier this year from Ford Motor Co have together incurred a loss of $383 million for the first half of the current year ended June. Total revenues stood at $7.07 billion.
However, between June 2 and June 30, the period following the Tata Motors takeover, the brands posted a profit of $58 million on revenues of $1.34 billion. Tata Motors completed the JLR deal on June 2. The prospectus expressed the company's concern that JLR could weigh on the financial health and business performance of Tata Motors. "Jaguar Land Rover had incurred losses in previous years and the combined financial performance of the company may be affected in the future by the performance of Jaguar Land Rover," it said. JLR was not included in the Tata Motors consolidated financial statements for fiscal 2008. The prospect further said, "We may fail to realise the anticipated benefits of the Jaguar Land Rover acquisition and the acquisition may also expose us to uncertainties and risks, any of which could adversely affect our future business performance and financial condition." Tata Motors is raising Rs 1,960 crore through the differential voting rights issue route, while another Rs 2,185 crore is being mobilised through ordinary shares. The vanilla rights issue is priced at Rs 340 a share, Rs 35 higher than the differential rights portion. Shareholders will get one rights share for every six they held. The proceeds of the rights offer will be used to part finance the $2.3-billion acquisition of JLR. At the company's recent AGM, chairman Ratan N Tata had said that the bureaucracy established by Ford had affected the two brands. However, Tata added that the biggest advantage they had was their loyal dealer community. After the announcement of the rights issue and other funding routes to repay the $3-billion bridge loan, analysts expect an equity dilution of around 40-45% in Tata Motors. For this to be compensated and EPS maintained, analysts expect JLR to contribute $250 million to the consolidated balance sheet for FY09 http://www.financialexpress.com/news/tata-motors-announces-383m-h1-loss-at-jlr/365136/ Writing is good, thinking is better. Cleverness is good, patience is better. Herman Hesse --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" 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/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
