Tata Sons Ltd aims to raise equity funds of $1 Billion estimated investment . In order to fund a fresh equity infusion in holding company. Tata Sons Ltd also aims contemplating a $1 Billion fund raise. Which includes Tata Motors Ltd. And Tata Power Ltd, multiple individuals informed.The Board of the holding company Tata explored alternative ways to collect the funds.
Each of two individuals stated, “The Board addressed different strategies available for fund-raising and it is hoped that a final decision would be taken in this regard shortly.”
Both Tata Motors and Tata Power sales were affected as India and most of the world announced widespread lock downs after the Coronavirus outbreak.
In the past few months, Tata Motors has struggled with weak sales, posting a loss of some 9,894 crore in the quarter of March. A CLSA report of the brokerage firm stated in May that the Indian enterprise has no equity value, indicating that net debt levels have risen and that deleveraging plans have been disrupted by COVID-19.
Tata Sons Ltd Holds Fundraiser
The study indicates that its domestic passenger and commercial vehicles markets had no realistic chance of recovery. CLSA claimed Tata Motors’ Jaguar Land Rover (JLR) Luxury Cars was the sole driver of the company’s assessment. Since JLR ‘s revenues represented 79% of its combined sales. Wle domestic commercial vehicle sales dropped 32% compared to the previous year.
Tata Power announced earlier this month that it would raise $2,600 from producer Tata Sons. To reinforce its balance sheet across a right-of-war issue. Also to increase parent ownership by 10 percent.
Since divesting its interest in Cennergi in South Africa for about $110 million. Hence, Tata Power successfully finished the sales of three ships for a total of $212.8 million.
Gujarat agreed earlier this month to revoke a previous government decree that allowed it to sell. Which was the Mundra power tariff agreement. With additionally higher coal procurement costs. In the light of the increasing international carbon prices. The decision lay behind years of negotiation between the Tata Power. And the five states that agreed to acquire it made old power purchase agreements nonviable.
“Tata Power is developing a strategic plan for strengthening the company’s foundations. Which will be through a combination of divestment. And business reorganization which will remove the balance sheet. And improve the company’s capital structure. “These initiatives are meant to strengthen the basics. And boost shareholder capital in the long term”. It concluded.
