Tata Motors, which owns 21 per cent in the Spanish coachbuilder, Hispano Carrocera, will buy the balance capital in the company. Brothers Gerardo Múgica and Andres Mugica, who now own 79 per cent, are expected to sell their entire stake to the Tatas for two million euros.
If that happens, the Tatas will have the entire company to themselves for only 14 million euros.
In 2005, the Indian company paid 12 million euros in equity, debt and technical licensing fees for 21 per cent of the coachbuilder, with a caveat that it could acquire the other 79 per cent by 2010 paying an additional two million euros, provided the Spanish firm met certain performance standards.
Hispano is on course to meet those standards.Tata Motors has also extended a 15 million euro unsecured subordinated loan and a letter of comfort to Citibank for working capital loans of seven million euros to Hispano.
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