Warburg Said in Advanced Talks for Tata Technologies Stake

Warburg Pincus is in advanced discussions to buy a stake in the engineering unit of Tata Motors Ltd., the manufacturer of Jaguar sports cars and Land Rover sport utility vehicles, people with knowledge of the matter said.

The private equity firm is in talks to buy a significant minority holding in Tata Technologies Ltd. for about $450 million, according to the people. A deal could be reached as soon as the next few weeks, the people said, asking not to be identified because the information is private.

Tata Technologies provides outsourced design, research and development services to the automotive, aerospace and industrial machinery industries. Tata Motors owns 70.4 percent of the Singapore-headquartered company, according to its annual report.

Selling a stake in the engineering unit would help Tata Motors cut gross debt that stood at 748 billion rupees ($11.2 billion) at the end of December. The company is exploring ways to optimize its capital by monetizing non-core assets and some of its investments, it said in its most recent quarterly report.

There’s no certainty the talks will result in a transaction, and another buyer could still emerge for the stake, the people said. A representative for Warburg Pincus declined to comment, while a representative for Tata Technologies didn’t respond to e-mailed questions.

“From time to time, we review the performance of our non-core assets and companies and see how we can monetize them,” Tata Motors said in an e-mailed statement. “We do not have any additional comment to offer at this point of time.”

Tata Technologies’s net income from operations after tax rose 9.8 percent to 2.23 billion rupees in the year ended March 2016. Alpha TC Holdings Pte, an investment firm backed by Japanese brokerage Mizuho Securities Co., owns an 8.7 percent stake in the company, while Tata Capital holds 4.4 percent, its annual report shows.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE