Tata Motors to cut $6.4bn debt 'substantially' over next 3 years

India's Tata Motors Ltd will significantly reduce its group automotive debt of 480 billion rupees ($6.4bn or roughly R107.38bn) over the next three years, the company's chairman said during its annual shareholder meeting on Tuesday.

Tata Motors is "deleveraging this business substantially" and has set targets to generate free cash flows, said Natarajan Chandrasekaran.

Car makers globally have been hit hard by the Covid-19 pandemic, which has hurt demand for cars and disrupted supply chains due to curbs on travel and the movement of goods.

This has derailed Tata Motors' turnaround plans for its domestic business and UK luxury unit Jaguar Land Rover (JLR), but the company said it is committed to cutting costs, tightening investment spending and improving profitability.

"The company is working with agility to transform towards a future that is strong, sustainable and financially rewarding," said Chandrasekaran, adding that the group would also look to "unlock non-core investments".

Tata Motors' domestic business is expected to generate free cash flows from the 2021 fiscal year, while JLR will achieve this a year later in 2022, the company's CFO PB Balaji said during the virtual shareholder meeting.

Shares of Tata Motors ended 5% higher on Tuesday, while the broader Mumbai market remained flat.