Tata Motors to reduce debt by Rs 1,500 crore

Tata Motors, one of the leading car maker of India has reduced its debts by Rs 1500 crore as a large number of its bondholders are opting for conversion of bonds into shares before maturity.

The company invited buyers of its foreign currency convertible bonds for converting their debt into stock, a year before maturity. Mr C Ramakrishnan who is chief financial officer of Tata Motors, said in a statement that reducing the debt is in line with the company’s efforts to de-leverage balance sheet.

According to company, 93% of the JPY series bondholders and 76% of USD series bondholders chose to convert their bonds into ordinary shares. The company had 11.8 billion yen-denominated notes (approximately Rs 595 crore) and $300 million (about Rs 1,380 crore) dollar-denominated notes due for conversion in March and April 2011, respectively.

The company has allotted 26.64 million equity shares to its bondholders, who used the option of converting their notes into equity. Banks like Standard Chartered, Citigroup, Credit Suisse and JP Morgan managed the offer. With this, Tata Motors on Tuesday appointed Carl Peter-Forster as managing director of the company.