Tata Motors on Tuesday said it will invest about Rs 10,000 crore on product development, capacity enhancement and plant modernisation.
The capex would be spread over two-to-three years. A long term financing plan would be evolved in the near future, the company said in a filing to the BSE.The company has proposed increasing borrowing limit up to Rs 30,000 crore.
It announced a postal ballot seeking shareholders’ approval and proposed raising funds not exceeding Rs 4,700 crore (with or without green-shoe option) in one or more tranches through issue of securities in domestic and international markets to fund expansion and reduce debt.
?The company has growth plans for expanding its product range and presence in the domestic and global markets in commercial and passenger vehicles,? the ballot read.
The company said that internal generation would partially fund the capital expenditure programme, ?it is thought prudent at this stage for the company to meet a part of this fund requirement for the said capital expenditure, product development, long term working capital as well as for such corporate purposes including investments in subsidiary companies in India or overseas for their business growth/other requirement,? read the postal ballot.
Tata Motors has on its balance sheet various high-cost debts. The company is leveraged with a net debt equity ratio of 1:1 on a stand-alone basis (consolidated basis 3.3:1) as on March 31, 2010.
The announcement talks of advisory fee payment to Ravi Kant, vice-chairman, with effect from June 2, 2009, at ?75,000 per annum (approximately Rs 51 lakh per annum) for services rendered to JLR.