Vehicle manufacturer Tata Motors has failed pay its vendors and suppliers over the past few months, as a result of which its accumulated unpaid dues have risen to Rs. 1,200 crore. The company has seen a number of serious financial problems in the recent past, including declining sales, the burden of acquiring British brands Jaguar and Land Rover and the shifting of the Nano’s manufacturing facility from Singur in West Bengal to Sanand in Gujarat. Tata Motors posted a loss of Rs. 263 crore in the quarter ending December 2008 – its first in seven years.
The company is now in the process of negotiating with its vendors and is trying to buy some more time. It may soon raise loans from banks to make at least part payments to its suppliers.
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