Ford to delay Jaguar announcement?
By Our Corporate Bureau | 21 Dec 2007
Ford may not name the preferred bidder for its Jaguar and Land Rover units until early in January, industry sources said on Thursday, 20 December. Earlier, a British newspaper had reported that automaker Tata Motors could be given preferred bidder status as early as Friday.
But sources said on Thursday that no announcement was expected, as negotiations continue between Tata and Ford officials. Ford executives had said earlier they expected to announce the sale of the two British automakers early next year.
Tata is vying with Mahindra & Mahindra and US private equity firm One Equity Partners for the units. Earlier this month, all three submitted bids that ranged from $1.5 billion to $2 billion. A preferred bidder designation would mean that Ford is focusing negotiations on one bidder.
Ford, which lost $12.6 billion last year, but earned $88 million in the first nine months of 2007, has been looking to sell Jaguar and Land Rover. It has mortgaged its assets to borrow money to stay operating, and expects to lose $12 billion to $14 billion until 2009, when it plans to return to sustained profitability.
Jaguar and Land Rover have been hit by unfavourable exchange rates and high production costs in Britain. Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000, joining them with Aston Martin and Volvo to form its Premier Automotive Group.
Earlier this year, the automaker completed the sale of its controlling stake in Aston Martin for $931 million in cash and preferred stock. But Ford has said it plans to keep Volvo for now, cutting its costs and making it a more premium brand.
