£340m European bank loan completes Jaguar Land Rover refinancing
Jaguar Land Rover has been given a £340 million tranche of funding by the European Investment Bank.
And the Midland carmaker’s Indian owners said the eight-year loan was the final step in its plan to refinance the under-pressure firm.
Tata Motors – which refused an offer of investment from the Government – said the new loan from the lending bank of the EU would go to finance low carbon technology, creating new micro and full hybrid drive trains and research into more energy efficient car bodies in the luxury car market.
Tata Motors chairman Ravi Kant said: "We are very happy with the support extended to us by the European Investment Bank, State Bank of India, Credit Suisse, and other banks. This will support the progress of turnaround in Jaguar Land Rover’s business in challenging market conditions, alongside cost cutting measures, increase of volumes and the improved margins strategy currently being implemented by Jaguar Land Rover. We view Jaguar Land Rover as a key part of Tata Motors and we feel confident about its outlook for the future."
Simon Brooks, the vice president of the EIB responsible for lending operations in the UK, added: "The EIB is pleased to be able to work closely with Tata Motors and Jaguar Land Rover to make a lasting contribution to automotive research that will enable the production of more environmentally friendly and energy efficient vehicles at a time of significant challenges for the European car industry."
Tata said the loan was the "last major element" of its funding plan for JLR. In 2009, the company secured more than £500 million of funding for Jaguar Land Rover, including facilities from State Bank of India, Standard Chartered Bank, Bank of Baroda, ABC International bank, GE Capital, and Burdale Financial Limited, a subsidiary of the Bank of Ireland.
The latest loan was structured with support from banks, including the State Bank of India, Bank of India and Bank of Baroda. Credit Suisse, Standard Chartered Bank, Deutsche Bank and JP Morgan are providing additional guarantees to meet EIB credit requirements.
The chief financial officer of Tata Motors, Mr C Ramakrishnan, said: "We have taken significant steps to meet our financing requirements and strengthen our balance sheet over a short timeframe in challenging and adverse market conditions. We are thankful to have received the support of Tata Sons, all investors and relationship banks. The business performance of our Indian and international operations have improved significantly and we feel comfortably positioned for the future."