India Watch : Tata Sons and Citigroup buy TML shares from Daimler
Automotive News Europe/Reuters, 9th March, 2010
MUMBAI (Reuters) — Tata Sons, the holding entity for Tata Group firms, and Citigroup have acquired 8.65 million shares in Tata Motors Limited from Germany’s Daimler AG.
Tata Sons bought 4 million Tata Motors shares at 750 rupees each, while Citigroup bought 4.65 million shares at 752.41 rupees each, according to data on the Bombay Stock Exchange website. Tata Motors shares closed at 770.90 rupees, down 3.2 percent in a weak Mumbai market.
Daimler was offering 25.6 million shares, a 5.34 percent stake, in India’s largest vehicle maker and will book a first-quarter gain of €265 million ($360.5 million) from selling its stake in India’s Tata Motors Ltd., helping the German carmaker offset an expected hit from its EADS stake.
“Tata Motors’ share price has risen significantly, especially last year, so Daimler will receive a substantial cash inflow of approximately €300 million from the sale of its shares,” a company statement said.
“The transaction will have a positive effect on Daimler’s EBIT of approximately 265 million euros and will be accounted for in the first quarter of 2010.”
The income from the Tata stake sale will help Daimler counter an expected writedown triggered by its 22.5 percent stake in aerospace group EADS, which last week announced a fresh €1.8 billion provision for its delayed A400M military transport plane project.
Daimler, a founding shareholder in EADS, has said it would have to book its share of the EADS accounting loss in its first-quarter results, which would be €405 million before tax, according to Reuters calculations.
[Source: Automotive News Europe]
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