Jaguar $1.6 bln bond issue oversubscribed
Luxury carmaker Jaguar Land Rover's 1.0 billion pound ($1.6 billion) bond sale saw "significant" oversubscription from investors, its Indian parent Tata Motors said Friday, as it priced the issue.
"We are pleased to have completed this transaction which we believe demonstrates the market's confidence in our company and its plans," said Jaguar Cars and Land Rover chief financial officer Kenneth Gregor.
The issue, designed to partly refinance debt and develop its operations, "was significantly oversubscribed by investors", Gregor added in a statement to the Bombay Stock Exchange but gave no further details.
Tata Motors called the sale a success and said it would help strengthen Jaguar Land Rover's finances without having to rely on the support of the parent company, which is India's biggest vehicle maker.
The deal was "a major milestone in significantly strengthening the capital structure" of the two luxury marques, Tata Motor's chief financial officer C. Ramakrishnan said.
The three-part sale includes a sterling bond and a dollar issue, both with a seven-year maturity. The final tranche will be a 10-year dollar-denominated bond.
Tata Motors bought Jaguar and Land Rover from US Ford Motor Co in 2008 for $2.3 billion -- a purchase that coincided with the global financial crisis that hit sales of the luxury cars.
The Indian company took a $3 billion loan to finance the purchase.
Jaguar Land Rover swung back to profit last year following a deep sales downturn during the financial slump.
Last week it said it was looking for a partner in the fast-growing Chinese car market and plans to invest five billion pounds ($8 billion) in developing new high-performance vehicles over the next five years.
© 2011 AFP