Tata Motors announces that Jaguar Land Rover has secured a loan of £340m from the European Investment Bank to invest in environmental projects.
The loan is to finance the development of micro and full hybrid drive trains and research into more energy efficient car bodies for the premium car market.
The loan is structured with guarantee support from banks, with Credit Suisse working in the lead with Jaguar Land Rover and Tata Motors in arranging the structure. State Bank of India played a key role in the facility, providing a guarantee along with Bank of India and Bank of Baroda. Credit Suisse, Standard Chartered Bank, Deutsche Bank and JP Morgan are providing additional guarantees to meet European Investment Bank (EIB) credit requirements.
“We are very happy with the support extended to us by the European Investment Bank, State Bank of India, Credit Suisse, and other banks,” said Mr Ravi Kant, Vice Chairman of Tata Motor. “This will support the progress of turnaround in Jaguar Land Rover’s business in challenging market conditions, alongside cost cutting measures, increase of volumes and the improved margins strategy currently being implemented by Jaguar Land Rover. We view Jaguar Land Rover as a key part of Tata Motors and we feel confident about its outlook for the future.”
The facility is an eight year amortising loan to finance development of micro and full hybrid drive trains and research into more energy efficient car bodies for the premium car segment by Jaguar Land Rover.
Mr Simon Brooks, European Investment Bank Vice President responsible for lending operations in the United Kingdom, said: “The EIB is pleased to be able to work closely with Tata Motors and Jaguar Land Rover to make a lasting contribution to automotive research that will enable the production of more environmentally friendly and energy efficient vehicles at a time of significant challenges for the European car industry.”
The EIB loan completes the last major element of the funding plan for Jaguar Land Rover, which has been an important part of Tata Motors’ efforts to strengthen its group balance sheet over the past year. In 2009, the company secured over £500 million of funding for Jaguar Land Rover, including facilities from State Bank of India, Standard Chartered Bank, Bank of Baroda, ABC International bank, GE Capital, and Burdale Financial Limited, a subsidiary of the Bank of Ireland.