Tata Motors may soon sneak past critics over the mistimed purchase and poor sales of marquee brands Jaguar and Land Rover, as it signed an agreement with GE Capital yesterday, to provide a working capital facility of up to 170 million pounds (Rs1,300 crore) for a five-year term.
In a statement, GE Capital, a division of General Electric Co, said the agreement represented ''an innovative structure'' to finance JLR finished vehicle stocks between the points of production and onward sale to dealers on a revolving basis.
The facility will boost working capital within the company by shortening the 30-40 day period it typically has to wait between producing hundreds of thousands of cars a year and delivering them to dealerships in 90 countries, the statement added.
''We are pleased that our funding plans have further progressed and welcome the confidence shown by GE Capital in the Jaguar Land Rover business,'' it quoted JLR's chief financial officer Ken Gregor as saying.
Last month, JLR had arranged loans of 500 million pounds (Rs3,700 crore) from Indian lenders, including Rs1,350 crore from State Bank of India. Tata Motors also raised $750 million (Rs3,463.5 crore) by selling securities, enabling it to refinance debt taken to purchase JLR. (See: Tata Motors secures £175 million new loan for JLR / Tata Motors raises $750 million within an hour to clear JLR debt)
GE Capital is one of the region's leading financial institutions, providing secured finance facilities to support small and mid-market customers in Europe, the Middle East and Africa.