Tata Motors has mandated State Bank of India (SBI) as the sole lead manager to raise $3 billion that will fund the acquisition of Jaguar and other auto brands. The deal comes as a shot in the arm for the country?s largest bank, which was not much involved in the earlier Tata-Corus deal.
Confirming the development, a senior SBI official said, ?For Tata Motors? acquisition corpus, we have already initiated the process for raising debt worth $3 billion in the overseas market through a syndicated approach. Citi-bank, Standard Chartered, BNP Paribas, JP Morgan, Tokyo Mitsubishi UFJ and Mizuho Financial Group are the other banks that will pool the resources. We may shortly approach a few Indian public sector banks, too.?
The Tata Group wants the acquisition corpus to be ready by April 10.
?We expect to raise the requisite funds as a foreign exchange bridge loan of 12 to 15 months at around 4.29% in the overseas market. Given the reputation and credibility the Tata group enjoys across the globe, it will not be difficult for us to accumulate the requisite debt at this interest rate in spite of the tight liquidity condition in the overseas market,? said the official.
Most Indian banks, especially the ones that have an established branch network in the UK, want to participate in the Tata Motors fund raising programme and are making no secret of it.
KC Chakrabarty, Punjab National Bank?s (PNB) chairman and managing director, said, ?Although we are keen to participate in funding the Jaguar deal, no syndication has approached us so far to raise the acquisition money. However, we look forward to an attractive pricing while contributing the share from PNB to any such syndication.?
KR Kamath, executive director, Bank of India, said, ?Though we have not received any proposal, the bank is willing to participate in funding the Tata-Jaguar deal, provided the funding terms and conditions are attractive.?