Tata Engineering Ltd

completed

The project consists of a $397.8 million capital expenditure and debt restructuring program which is an integral part of the operating and financial restructuring of Telco. This restructuring program intends to make Telco a globally competitive automobile manufacturer. The project is divided into a $256.3 million program for product development and modernization and a $141.5 million debt retirement/refinancing program. IFC will provide a partial credit guarantee of up to $65 million for a $103 million local currency bond issue to part finance the project. Telco currently operate three manufacturing facilities, at Jamshedpur (Eastern India), Pune (Western India) and Lucknow (Northern India). A fourth facility is planned for Dharwad (Southwest India). Telco aim to create a seamless organization that promotes innovation, excellence, as well as the Tata core values of integrity, customer focus, corporate citizenship and a "passion for engineering". Commitment to high standards of safety, environment and health are also espoused in the Tata Code of Conduct. The quality of Telco’s environment and social development programs is extremely high and fully integrated into the company’s operational philosophy and culture. The welfare of its employees is also extremely high as evidenced by staff turnover of less than 2%. Telco’s mission is also to upgrade the quality of life of communities in and around the company’s operations. Telco management are fully committed to implementing the core values of the Tata Group, however, a question needs to be answered with respect to the financial implications of such a policy. A strategic framework should be formulated, which outlines the way forward for companies which form past of the Tata Group and which have major on-going obligations against a backdrop of increasing global competitiveness.