Mumbai: Tata Motors Ltd has arranged a $3 billion one-year bridge loan from a consortium of banks that includes SBI, Citigroup, JPMorgan and others, to finance the acquisition of Ford Motor's UK luxury brands Jaguar and Land Rover.
The other banks in the consortium are: Standard Chartered, BNP Paribas, Tokyo Mitsubishi UFJ and Mizuho Financial Group.
The amount has been financed equally by each member of the consortium - around $37.5 million - source said.
Ford and Tata Motors are expected to sign an agreement on the Jaguar and Land Rover brands in the middle of next week, sources close to the developments said.
"It could be some time around March 26," sources said.
A Tata-Ford deal, expected at the start of this month, had to be held back as the two firms discussed their future relationship, including technology and supply of spares and engines for the Jaguar and Land Rover brands.
Tata Motors is believed to have sought price guarantees for the engines it would have to buy from Ford Motor Co.
While Tata may not get any concessions from Ford, it could use the issue as leverage to further reduce the purchase price for the two UK brands.
The Tata Group, which also needed money to fund its small car project `Nano', had plans to raise around $4 billion in debt on domestic and overseas markets.
Tata is facing the debt market amidst a review of its credit rating by Standard & Poor's, and a global financial crisis that has raised debt premiums.
Moreover, the amount of leveraged loans from equity funds that had in previous years helped to finance a boom in mergers and acquisitions have also dried down with the US subprime mortgage market crisis.