Despite their negative balance, JLR is about to receive a government guarantee for a bridge loan, as negotiations between owner Tata Motors and the British officials are drawing towards a conclusion.
According to a report by Financial Times, citing a person familiar with the matter, the UK is prepared to give JLR a guarantee for a 175 million pounds loan. Tata Motors is said to push for a 12 month-long loan. The only problem is that the UK government is only prepared to give Tata six month, as well as asking for board representation.
Back in early July, the confirmation of loan talks came from the British prime minister, Gordon Brown.
“I talked to Mr Tata a few days ago. I assured him of our willingness to help Jaguar and Land Rover make the investments that they want to make. We have been in correspondence with them on proposals we have made to the company, and their response to these proposals," Brown said.
“And we are determined to work with Jaguar to make sure we have a strong and dynamic and high technology car industry in this country. So, talks will continue with Jaguar.”
JLR needs the government loan to prevent plant closures in the UK. The warning came from Ravi Kant, chairman of Tata Motors, who said "there may be requirements in the future to shut plants.”