Tata funding comes with a JLR warning
The threat of closure still hangs over one of Jaguar Land Rover’s three assembly plants despite yesterday’s announcement that the luxury carmaker’s Indian owner had secured bank funding to help it through the recession.
Tata Motors, which bought JLR from Ford for £1 billion in June 2008, would not say how much money it had raised or where from.
But the Birmingham Mail understands that the cash, in the region of £175 million, will come from a consortium that includes “nationalised” banks Lloyds and RBS.
After months of tortuous negotiations with Lord Mandelson’s Department for Business, Innovations and Skills over a tide-over loan or loan guarantee at commercial rates, Tata said it had “successfully concluded” parallel talks with unnamed commercial banks.
The money is on top of the £75 million that Tata is getting from Bank of Ireland subsidiary Burdale Financial by way of a mortgage on Land Rover’s stock and receivables.
Tata said it no longer needed help from the taxpayer and expects to guarantee an additional £340 million advance from the European Investment Bank to develop a new generation of low emission cars from its own resources.
JLR, Britain’s biggest manufacturing employer, has struggled for about a year after being hit by the double blow of the global credit crunch that saw its normal credit lines dry up and a slump in sales due to the recession.
Commentators said yesterday’s announcement was a sign that liquidity was now beginning to flow again through the financial markets.
