Mahindra & Mahindra (M&M) is likely to mobilise Rs 2,000 crore long-term debt for its commercial vehicle project in Chakan in Maharashtra.

M&M proposes to invest Rs 4,000 crore in the Chakan plant and the investment is expected to be completed by June 2010. At least half of the planned capex is expected to be raised through a debt from a consortium of banks, mostly Indian.

This apart, the company has chalked out a business plan of multiple JVs at Chakan comprising Mahindra Navistar Automotives (MNAL) and Mahindra Navistar Engine - the JV for commercial vehicles and engines and Mahindra & Mahindra Commercial Vehicles, the M&M's light commercial vehicle project.

MNAL is to produce medium and heavy trucks above 25 tonne and tractor trailers above 49 tonne. The JV has already invested Rs 1,200 crore, and it plans to raise another Rs 500-600 crore long-term debt from Indian banks in the next three-six months. Two of M&Ms products, the Loadking and Tourister have been transferred to the new JV. The funds raised are to be used for product development, tools and dyes at the companies greenfield unit in Chakan, Maharashtra to produce the medium and heavy trucks with capacity of more than 3.5 tonne.

Also See:

M&M plans automobile unit in Chennai (07-Nov-09)

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