Jaguar in UK govt talks for 1 bln stg loan: paper
LONDON (Reuters) - British-based carmaker Jaguar Land Rover is in secret talks with the UK government over a 1 billion pound ($1.48 billion) loan, just nine months after the Indian conglomerate Tata Group bought the luxury carmaker, the Sunday Times newspaper reported.
The request reflects the sharp downturn in the global car market which has already pushed a handful of big carmakers 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 carmaker'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.
One of Tata's listed enterprises Tata Motors (TAMO.BO) paid $2.3 billion for Jaguar and Land Rover earlier this year and financed the acquisition with a $3 billion bridging loan, but since then sales of new cars have plunged.
Tata is looking to the UK government for a bridging loan for the next 24 months as it is difficult to access funding markets and the market for its vehicle has fallen causing big problems finding the cash to make debt payments, the paper said.
The group employs 15,000 workers in the UK. Last year Land Rover produced 230,000 vehicles at its Solihull plant in the English West Midlands while Jaguar made 54,000 cars at its nearby Castle Bromwich plant and at Halewood on Merseyside in north-west England. It has already cut shifts at the plants.
(Reporting by David Jones; Editing by David Cowell)
