London: Tata Motors has secured a £175 million ($289 million) private sector loan for its luxury unit Jaguar Land Rover and no longer needs financial support from Britain, a UK government spokesman said on Tuesday.
The Department of Business, Enterprise and Regulatory Reform (BERR) has been holding talks with India’s Tata and Jaguar Land Rover (JLR) on guaranteeing both short and long-term financing.
The media quoted industry experts in May as saying the talks were stalled because the carmaker would not accept the tough conditions imposed by the Britain in return for guaranteeing a loan, including the right of the government to veto management decisions.
The talks centred on a rescue package that involved a £340 million approved loan from the European Investment Bank (EIB), to be used for the development of environmental technologies, and £450 million from British banks and underwritten by the government.
BERR said on Tuesday that Tata had secured private sector funding for the company’s short-term financial needs.
“This additional funding will allow JLR to invest in future models and successfully launch the new XJ saloon on schedule and updated Land Rover models later this year,” business secretary Peter Mandelson said in a statement.
“The government had offered bridging finance from the automotive assistance programme if necessary. We understand the Tata group will now be successful in resolving longer term financial needs but we are willing to help again if necessary.”
Britain pledged in January to guarantee up to £2.3 billion of loans, including £1.3 billion from the EIB, to help its ailing car industry cope with a slump in demand.
More than 14,000 workers are employed at Jaguar Land Rover’s five British sites. Tata bought Jaguar and Land Rover from Ford in June last year for about $2.3 billion.