London: The British government has said that it is ready to guarantee loans to Indian auto giant Tata group-owned Jaguar Land Rover, for which it is talking with European banks on the behalf of the cash-strapped carmaker.
While making it clear that the primary financial responsibility of JLR rests with the Tatas, the UK continues to hold “confidential discussions” over both short and long-term financing and business plans, an official at the British government’s Department of Business, Enterprise and Regulatory Reform (BEFR) told PTI.
JLR, acquired by the Tatas in April last year for £1.15 billion from US auto giant Ford, has been facing financial troubles due to the global economic slowdown, and the company had sought assistance from the government.
Shaky ground: A Jaguar on display. Ratan Tata had earlier said he wanted the UK government to facilitate access to credit for JLR. Qilai Shen / Bloomberg
Earlier in a media interview, Tata group chief Ratan Tata had said that he only wanted the UK government to facilitate access to credit and not a bailout for JLR. Besides, some other media reports have said recently that talks between the Tatas and the UK government have hit an impasse.
“The government wants to see JLR safely through difficult trading times and provide stability for the company and its employees. We regard JLR as a visible company with good long-term prospects,” the BERR spokesperson said.
”That is why the government is having confidential discussions with JLR and its parent company over both short and long-term financing and business plans. These negotiations are continuing,“ BERR said.
The official further said that the government has actively encouraging Tatas “for the last six months to put together a long-term funding package.
“In parallel we have been talking to banks on their behalf, have appointed financial advisers to assist and we are prepared to guarantee loans from the European investment bank on the right terms,” the official added.
However “any government financial assistance must, of course, protect taxpayers’ money. But on this basis, we are prepared to help although not on any terms,” BERR said.
JLR, which employs 15,000 people, is awaiting the government approval for the £340 million loan from the European Investment Bank. The EIB has already given its approval several weeks ago, but cannot dispense the cash until Britain agrees to repay it if JLR goes bankrupt.