London: The UK government has asked the Tata group to accept a revised proposal to guarantee hundreds of millions of pounds of short-term funding for luxury brands Jaguar Land Rover (JLR) or risk the plan being taken off, The Telegraph said in a report published online on Saturday.
“The warning is understood to have been delivered by Lord Mandelson to Tata Motors in recent days following a fresh funding proposal that was made by the government earlier this month,” the report said.
According to the report, at stake is a government guarantee for €340 million (around Rs2,335.8 crore) of European Investment Bank loans. A separate short-term commercial loan of up to £200 million (around Rs1,588 crore) is also understood to being negotiated by the company before a longer-term financing structure is established, it added.
The report said the deal proposed by the UK government is understood to have removed a contentious condition contained in the original offer—“to which Tata objected”—that would have given the taxpayer a board representation at JLR.
“However, it includes a commitment that Tata would not be able to alter the car manufacturer’s business plan without the approval of ministers. It was unclear last night whether the new terms are acceptable to Tata,” the report said.