Tata's JLR to receive nearly £800 million from UK government

04 April 2009

The  UK government has finally agreed to give JLR nearly £800 million ($1.1 billion) from the government's £2.3 billion bailout package announced in January. (See: Britain unveils £2.3-billion loan for car industry)  after Ratan Tata, chairman of Jaguar Land Rover, last month voiced his disappointment over the UK government's inability to guarantee loans to JLR. (See: Ratan Tata criticises the UK government's failure to assist JLR)

According to media reports, JLR will receive about £280 million ($418 million) as loan from the European Investment Bank underwritten by the government for the making environment-friendly cars while the remaining £500 million ($733 million) will come in the form of a loan guarantee backed by the government.

The government will make the announcement after the board meeting of the European Investment Bank, which will be held on Tuesday.

Like in the US and Europe, the recession in the UK has brought its automobile industry down to its knees as declining sales and mounting losses risk over 100,000 jobs in the UK auto industry, including suppliers.

JLR, along with other UK car manufacturers, had been seeking financial help from the UK government, not because it needed a bailout, but it required liquidity to run its day-to-day operations and the UK banks had stopped lending.

Although the UK government had announced the auto industry bailout package in January, these loans have not been forthcoming till date due to the tardy and lengthy procedures of the European Investment Bank, which had confirmed through its website that JLR had applied for £281million in loans.