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Raising of Long Term Capital Funds Press kit

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20 August, 2008

At the meeting of the Board of Directors of Tata Motors Ltd. held today, the Directors reviewed the progress of the long-term financing plan which had been announced in May 2008, inter-alia for the Jaguar-Land Rover acquisition. At that time, the Company had announced that a part of the total funds required would be raised through a Rights Issue to the shareholders of three simultaneous but unlinked securities namely:

a) an issue of Ordinary Shares of a total amount of about Rs.2,200 crores;
b) an issue of ‘A’ Ordinary Shares having differential voting rights (viz. 1 vote for every 10 shares held) of a total amount of about Rs.2,000 crores and
c) an issue of 0.5% 5-year Convertible Preference Shares of a total amount of about Rs.3,000 crores, which would be convertible into ‘A’ Ordinary Shares at any time after 3 years but before 5 years from the date of allotment.

The detailed terms on which the above three securities involving a total amount of about Rs.7,200 crores would be issued was to be decided after the relevant procedure and process was completed and just before the Company was ready to actually make the Rights Issue.

Taking into account the current situation in the Capital Market and the change in the level of prices in the stock markets since May 2008, the Board of Directors reviewed the earlier fund raising proposal. With a view to keep the increase in the Share Capital as low as possible, the Board decided –

1. to restrict the Rights Issue only to two simultaneous but unlinked securities namely – (a) an issue of Ordinary Shares and (b) an issue of ‘A’ Ordinary Shares having differential voting rights, as already announced; and

2. in place of the issue of Convertible Preference Shares, it is now proposed to raise the required resources by monetizing a part of the Company’s investments through a phased divestment of certain investments (preferably as inter-group sales wherever feasible) at prevailing market prices over the next 6 to 8 months. The funds released from such future divestments together with those already sold during the current financial year, will form part of the resources to be raised for repaying the bridging loan taken for the Jaguar-Land Rover acquisition.

The process for the Rights Issue is making satisfactory progress considering the complex information to be included in the Offer Document about the Company, its subsidiaries and also the Jaguar-Land Rover acquisition and this process is expected to be completed in the near future.

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