In order to control the drop in rating internationally, Tata Motors plans to raise long term capital funds. A meeting in this regard is schedule on May 28.
The company has disclosed no further information. However, it is suspected that Moody’s Investors Service, a global ratings company had stated that Tata Motors was a possible candidate for downgrade. However, a bridge loan could act a leverage to increase Tata Motors rating.
The company was not expected to show a decline in profit margins of 6.5 percent. This was due to the massive investments by the company in global deals. The company made huge investment for the world’s cheapest car Nano, which is now under production. Also, funds to the tune of $ 4 billion had been raised for its local and overseas plans, followed by $ 3 billion for the Ford deal in the last few months.
The company will show the investments of $ 2.3 billion made for Jaguar and Land Rover brands with Ford Motors Company, in its 4th quarter earnings on May 28, 2008.
With this announcement, the Tata Motors stocks climbed by 1.6 percent on May 21st. The percentage is calculated as an appreciation of $1.