Tata's Jaguar/Land Rover, In Secret Plea For 1 Billion Pound Government Loan.

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JAGUAR LAND ROVER (JLR) is in secret talks with the government for a £1 billion loan, just nine months after Tata, the Indian conglomerate, bought the luxury-car marque.

The request demonstrates the sharp downturn in the global car market, which has already pushed a handful of the big car manufacturers to the edge of bankruptcy.

The speed of the economic decline has not just hit the motor industry. A number of large British-based industrial groups are also considering asking the government for financial support. If help is not given tens of thousands of jobs are at stake.

According to one government official familiar with the approach made by JLR, Gordon Brown is studying the request and an answer could be made in the next fortnight.

Tata paid $2.3 billion for JLR and financed the acquisition with a $3 billion (£2 billion) bridging loan. Since then sales of new cars have plunged which has caused big problems with the cash flow needed to service debt payments.

It comes at a time when Tata – one of India’s most successful companies – is also facing financial issues. It paid $11.3 billion 22 months ago for steelmaker Corus and since then the metal price has collapsed. Similarly, shares in Tata Consulting Services, its American-listed IT business, have also tumbled, as have shares in Tata Motors.

Ratan Tata, the conglomerate’s chairman, has put on hold further acquisitions amid the difficulty in raising bank finance and in the face of the economic slowdown.

http://business.timesonline.co.uk/to...cle5213217.ece