Daimler reported to sell 25.6 million shares in Tata
Daimler has made public, or the public got hold of the info, one way or another, two major reasons for us to believe it’s going really down with these harsh times. Firstly it’s huge 2009 losses and secondly the company’s decision to cut its dividend for the first time in 14 years. This is of course no big surprise actually considering that the luxury market was the first and foremost to go down with the financial crisis we are enduring.
But how does this affect Indian Tata?
Automotive News reports that Daimler is looking to raise money to rebuild its business in developed regions by selling its 25.6 million shares of Tata Motors stock. The move would reportedly net the German automaker an estimated $429 million, four to seven percent below market value. Shares of Tata Motors stock are up 19 percent since February 26, so Daimler stands to earn some serious coin from the share sell off.
Moreover it seems that focus will be laid more on the Chinese segment than India, a rather wise decision from Daimler in our opinion, if not such a positive one for most buyers in Europe and India.
“We certainly now have as a priority turning around the mature markets and then China. This is certainly now a higher priority for Daimler than India.”
declared Juergen Pieper at Metzler Equities.
Daimler is selling, but Tata isn’t able or willing to buy back. That means that Daimler is looking to sell the stocks on the open market in block deals, which moves large amounts of stock at once. However specialists do not predict that this will affect in any significant way the stock value for the Indian maker.
[Source: Automotive News - | Image: Sascha Schuermann/AFP/Getty Images]