Fiat India isclose to finalising a loan of $510 million

Fiat India Automobiles, a joint venture between Tata Motors and Fiat, is going to finalise a loan of $510 million that is about Rs 2,458
crore at current exchange rates for its capex and working capital programmes. The term loan of Rs 1,000 crore has a maturity of 6 years while the ECA loan of euro 130 million that is around Rs 900 crore has a maturity of 8 years. The working capital loan of Rs 600 crore has a tenure of one year.

Citi was the sole arranger for the loans. The rupee term loan and the working capital loan were given by State Bank of India, IDBI Bank, Punjab National Bank and Union Bank of India. By the year 2012, the capacity of the Ranjangaon plant would be expanded to 2 lakh cars, 3 lakh diesel engines, and 3 lakh spare parts and accessories per annum. At present, the plant, which makes the Fiat Palio, the Grande Punto and the Linea in the B and C segments, has the capacity to produce one lakh cars and two lakh engines.  The distribution and service of Fiat-branded cars in India will continue to be managed by Tata Motors, in line with the agreement signed in March 2006.