London: UK-based car maker Jaguar Land Rover is in secret talks with the UK government over a £1 billion (Rs7,440 crore today) loan, just nine months after the Indian conglomerate Tata Group bought the luxury car maker, the ‘Sunday Times’ newspaper reported.
The request reflects the sharp downturn in the global car market which has already pushed a handful of big car makers to the edge of bankruptcy, and one UK government source said Prime Minister Gordon Brown is studying the request, the paper added. In a Jaguar Land Rover statement, the group said on Sunday it supported UK and European car maker’s industry bodies seeking help from governments but would not comment specifically. “We are not going to comment on speculation on confidential discussions with government,” the statement said.
Desperate measures: JLR chief executive David Smith, according to a media report, has made a direct plea to the government for cash.
The ‘Sunday Times’ further added that “David Smith, the chief executive of JLR, has made a direct plea to the government for cash. He believes that with help being given on the Continent and in America to car makers Britain has a good case for financial aid.”
One of Tata’s listed enterprises Tata Motors Ltd paid $2.3 billion (Rs11,500 crore as on Friday) for Jaguar and Land Rover earlier this year and financed the acquisition with a $3 billion bridging loan.
Tata is looking to the UK government for a bridging loan for the next 24 months as it is difficult to access funding markets, the paper said.
(PTI contributed to this story.)