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Jaguar, Land Rover countdown

2008-03-25 12:11
Tata was tight-lipped on Tuesday as speculation mounted that Ford was set to announce this week the sale of its luxury brands Jaguar and Land Rover to the Indian firm.

A Tata Group spokesperson said he had no guidance to give on the deal. "We have nothing to tell you now," he said.

Tata Group chairman Ratan Tata and Tata Motors Managing Director Ravi Kant are scheduled to hold a media conference on the company's pick-up trucks at the Bangkok Motor Show on Thursday.

On Monday, Kant declined to answer questions on the Ford deal at a function in Mumbai for Fiat India Automobiles, the Indian joint venture between Tata and Italy's Fiat.

The Financial Times on Monday said Ford would announce the sale of the luxury brands to Tata Motors for about $2 billion on Wednesday, a day sources had previously told Reuters was a likely date for the deal.

The sale would include a pledge by Ford to contribute to the pension fund for workers at Jaguar and Land Rover and a commitment by Tata to continue buying engines from Ford, the paper said.

Sources close to the deal told Reuters last week that Ford was expected to announce the sale this week, meeting Ford's target of closing the deal by the end of the first quarter.

Tata is launching a $3bn syndicated loan, and also said this month that it planned to raise up to $1bn in overseas and/or domestic markets.

Analysts have said the global liquidity crunch could make the deal more expensive than Tata initially planned, as the cost of borrowing has risen 200-300 basis points since last July when Tata's interest in the brands first surfaced.

Analysts have also expressed doubts about how Tata will incorporate the luxury brands into its stable of sturdy trucks and functional passenger cars, including the Nano, the world's cheapest car which it unveiled in January.

Ford, which lost $2.7 billion in 2007 and $12.6 billion in 2006, is spinning off Jaguar and Land Rover to focus on turning around its loss-making operations in North America.

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