Mumbai: Tata Motors on Tuesday said it acquired 79% stake in Spain-based Hispano Carrocera SA, a bus and coach manufacturing company. The Indian vehicles major already holds 21% stake in the Spanish firm, which it bought in 2005 for around Rs 70 crore (including equity, debt and technology licensing). Tata Motors had an option to acquire 100% holding in the Spanish company.

In response to a query from FE, a company spokesperson said, “The acqusition of the 79% stake in Hispano Carrocera has been internally funded. It is a minuscule amount. Hispano has been converted into a wholly owned subsidiary to close integration with the company’s bus market strategy in all relevant markets. “

As per Tata Motors’ 2008-09 annual report, the company had an option to acquire the remaining 79% of share through one or more transfers, as per terms and conditions duly agreed upon at a price not exceeding Rs 13.51 crore as on March 31, 2009. The shares of Tata Motors on Tuesday closed at Rs 578.75, up 0.36%, on the BSE.

Tata Motors has given an unsecured subordinated loan of Rs 101.26 crore as on March 31, 2009, to Hispano. In addition to that, a letter of comfort has been given to Citibank NA against working capital loans extended by the bank to Hispano aggregating Rs 81.07 crore as on March 31, 2009. Tata Motors has also given an undertaking to Citibank NA for non-disposal of its shareholding in Hispano during the tenure of the loan. Tata Motors has licence for technology and brand rights from Hispano.