Tatas' Jaguar-Land Rover may get UK bailout after all

The Tata Group's troubled automotive acquisition, Jaguar-Land Rover, may get a bailout from the UK government after all, according to indications on Sunday. An official of the British department of business, enterprise and regulatory reform said that it is in confidential discussions with the Tata Group on a JLR deal guaranteeing loans.

However, BEER has made it clear that the primary financial responsibility for sustaining JLR rests with Tata Motors Ltd.

Tata Group chairman, Ratan Tata, admitted recently that the acquisition was badly mistimed. Tata Motors acquired JLR for £1.15 billion in April last year from US auto major Ford Inc. JLR, which employs around 15,000 workers, axed 450 jobs in January due to falling demand.

''The (British) government wants to see JLR safely through difficult trading times and provide stability for the company and its employees. We regard JLR as a visible company with good long-term prospects. That's why the government is having confidential discussions with JLR and its parent company over both short and long-term financing and business plans. These negotiations are continuing,'' the BEER spokesperson is reported to have said.

The British government, which has appointed financial advisors to assist Tata Motors, is prepared to guarantee loans from the European Investment Bank on the right terms, the official said.

The EIB has already given its approval to a £340 million loan several weeks ago, but cannot disburse the cash until the British government agrees to repay it if JLR goes bankrupt.

Earlier, there were reports in the British media that financial support for JLR from the EIB was in jeopardy as Tata Motors declined to accept the tough conditions imposed by the British government in return for guaranteeing the loan, including the right to veto management decisions.