New Delhi: Homegrown auto firm Tata Motors on Thursday said its UK-based subsidiary Jaguar Land Rover (JLR) has secured £340 million loan from the European Investment Bank (EIB) that will be utilized for research and development.
“The facility (loan) is an eight year amortizing loan to finance development of micro and full hybrid drive trains and research into more energy efficient car bodies for the premium car segment by Jaguar Land Rover,” the company said in a statement.
These activities will contribute to lower carbon dioxide (CO2) emissions and the loan was granted under the European Clean Transport Facility, it added.
“This will support the progress of turnaround in JLR’s business in challenging market conditions, alongside cost cutting measures, increase of volumes and the improved margins strategy currently being implemented by JLR,” Tata Motors vice-chairman Ravi Kant said.
The loan is structured with guarantee support from banks, including State Bank of India and Bank of Baroda, with Credit Suisse working in the lead. Credit Suisse, Standard Chartered Bank, Deutsche Bank and JP Morgan are providing additional guarantees to meet EIB credit requirements.
The EIB loan completes the last major element of the funding plan for Jaguar Land Rover, which has been an important part of Tata Motors’ efforts to strengthen its group balance sheet over the past year, the company said.
In 2009, JLR secured over £500 million of funding, including facilities from SBI, StanChart, Bank of Baroda, GE Capital, and Bank of Ireland.