Due to increased lending rates and slow markets,
Last week, Tata said and was reported it plans to borrow anywhere from $3 to $4 billion to help in the purchase from Ford as well as build its Nano mini-car, the world’s least expensive. The buy is expected to cost about $2 billion, while the Nano is due to launch in the second half of 2008. Tata is looking to borrow the money from nine banks, according to Reuters.
Getting so heavily in debt is expected to hurt Tata’s stock ratings. “Taking on a big chunk of debt on their books won’t be good. And these brands have very poor cash flow,” said Rishi Sahay, director at IndusView Partners.
