JLR ties up three-year financing for inventory

S Kalyana Ramanathan / London August 11, 2009

Tata Motors-owned Jaguar Land Rover (JLR) said yesterday it had successfully secured a financing facility of up to £75 million (Rs 600 crore) with Burdale Financial Ltd, a member of the Bank of Ireland Group.

The package consists of a three-year committed facility to finance Land Rover’s parts and accessories’ inventories and receivables in the UK and the US. It does not form part of JLR’s applications to the UK government’s Automotive Assistance Programme, about which discussions continue, the company said in a media statement.

Said Ken Gregor, CFO: “Jaguar Land Rover is pleased to have concluded this facility, which is an important element of our working capital financing arrangements.”

This is an important element of JLR’s working capital financing to cover the key Land Rover parts and accessories’ inventories and receivables part of our business, which has a high cash requirement, to function properly.

The company continues to negotiate with the UK government for securing a guarantee on a £340 million loan from the European Investment Bank, which was approved by the Luxembourg-based bank in April. According to recent reports in the media, most conditions have been sorted between JLR and the UK government and the government guarantee could be secured soon.

JLR is also negotiating for loans from Indian banks like Bank of Baroda, the status of which is yet to be announced officially by the company.