Tata Motors is expected to obtain the agreement of its banks to roll over about $1.05 billion in debt, rescuing India’s largest carmaker from the brink of default.
The extension of the loan until the end of 2010 will complete the refinancing of a $3bn bridge loan Tata Motors took out last year to finance its acquisition of Jaguar Land Rover. The loan is due on Friday (May 29).
But Tata still faces an uphill task to save Jaguar and Land Rover. It has pumped £800-£900 million into the manufacturers to cover operating losses since the car industry’s crisis began last year. It is also seeking UK Government loan guarantees to raise further capital.