Tata Motors to sell unit stakes to help fund deal

MUMBAI (Reuters) - Tata Motors Ltd will divest stakes in some of its units to help finance the deal to buy luxury brands Jaguar and Land Rover from Ford Motor Co, its chief financial officer said on Wednesday.

Jaguar and Land Rover would continue to operate as separate brands after the acquisition by Tata Motors, India's top bus and truck maker, C. Ramakrishnan told a teleconference after the $2.3 billion deal was announced.

"Tata Motors is also reviewing an undertaking, putting in place a disinvestment programme, unlocking value from some of our investments in various subsidiaries," he said, but declined to identify companies in which Tata Motors could sell a stake.

"That plan is getting finalised and one or two actions are already in place," he said.

The purchase was being made through Tata Motors UK Holding Company, Ramakrishnan said.

Tata Motors had tied up with a syndicate of banks to raise $3 billion by way of bridge finance, which would last 15 months.

"We will refinance this bridge finance through an appropriate mix of equity and debt and disinvestment in subsidiaries," he said.

Standard & Poor's placed Tata Motors on review for a possible downgrade in January from its current high-yield "BB+" rating, citing the potential increase in its debt load from the acquisition of the venerable Jaguar and Land Rover brands.

"I think the rating agencies will review the profile of the company after a large acquisition," Ramakrishnan said.

"We are aware that the rating agencies have announced a watch recently," he said.