Tata secures private financing for Jaguar
August 12, 2009
By Sapa-AFP
London - India's Tata Motors had secured private funding for its British luxury car maker, Jaguar Land Rover (JLR), meaning the firm would no longer be seeking state help, it said yesterday.
Tata Motors, which bought JLR in June last year, said it had secured £175 million (R2.3 billion) of funds from the private sector. It first approached the government for funding last September.
"Tata Motors and JLR have been in discussions with commercial banks for JLR funding facilities, many of which have been successfully concluded in the last few months, and the balance is expected to be completed in the coming weeks," the companies said.
They "expect that the long-term loan from the European Investment Bank of £340m, sanctioned to JLR, can also be successfully secured.
"With the positive trend... in financial markets... these arrangements have been and are expected to be concluded without necessitating guarantees from the UK government."
Tata Motors completed its $2.3bn (R18.5bn) acquisition of JLR from Ford Motor in June last year. The ailing US car maker sold the brands to focus on turning around its North American operations.
About 2 000 people have been laid off at JLR in recent years, with plants shut down and sabbaticals given to staff. Trade unions have been pushing for more government support for JLR, which employs about 15 000 people in the UK, as the global economic downturn puts the brakes on car sales.
UK Business Secretary Peter Mandelson welcomed yesterday's announcement. "This additional funding will allow JLR to invest in future models," he said. "We understand the Tata group will now be successful in resolving longer-term financial needs, but we are willing to help again if necessary."
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