Tata Motors snubs UK's loan offer
30 November 2009
Tata Motors has once again snubbed the UK government by rejecting its £10-million loan offered to Jaguar Land Rover's European Technical Centre (TMETC) for the manufacturing of electric car
The London's Sunday Times reported yesterday, "The Indian conglomerate has snubbed Lord Mandelson, the UK business secretary, rejecting the loan for a technical centre in the Midlands."
In September 2009, The UK government finally announced its first payment from its £2.3-billion aid package announced in January for the ailing Britsh car industry, which has only been on paper, (See: UK's £2.3-billion auto bailout only on paper: former government negotiator) and extended a £10-million loan offer to Tata Motors European Technical Centre (TMETC) for the manufacturing of electric car. (See: UK finally grants its first £10-million auto loan)
Prior to that in August, Tata Motors had rejected the stiff terms and conditions of a proposed UK government loan for its cash-strapped UK subsidiary saying it no longer required the loan as it had secured a £75 million debt facility from a private bank for its working capital arrangements. (See: Flush with Irish funds, Tata Motors spurns UK bailout for Jaguar)
Tata Motors secured a three-year loan of £175 million for JLR from Bank of Ireland's UK finance arm, Burdale Financial Limited, Standard Chartered Bank and Bank of Baroda by mortgaging the stock and receivables of its Land Rover brand in the UK and the US. (See: Tata Motors secures £175 million new loan for JLR)
Quoting industry sources, the report said the Tatas, owner of premium car brands Jaguar and Land Rover (JLR), had recently told the government that it did not want the money. "It has decided it can get better terms from commercial lenders," the newspaper said.