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A debt facility of £75 million for Jaguar and Land Rover (JLR) operations has been provided for Tata Motors. This debt facility was obtained by Tata Motors by mortgaging stock and receivables of Land Rover.
The two British brands were actually struggling to meet working capital requirements since the demand for luxury cars are reducing rapidly because of global economic recession. JLR had reported a loss of £281 million in the ten months ending March 2009.
Ken Gregor, CFO of the brands, said, "JLR is pleased to have concluded this facility which is an important element of our working capital financing arrangements." While YOY sales of Land Rover have gone down by 37% at 77,529 units in the first seven months of 2009 (January-July), sales of Jaguar have witnessed a plunge by 28% at 30,167 units.
JLR can now have some relief as the two brands are trying to for financial aid from the UK government as loan guarantees so that they can overcome the tough scenario. The financial aid has been delayed as Tata Motors is not willing to accept certain "stiff" terms and conditions that the UK government has asked for. The issue had seen Tata group chairman Ratan Tata commenting that the British government "does not appear to care about the manufacturing sector."
