Jaguar Land Rover (JLR), owned by Tata Motors, has entered into agreements with banks in China for loans worth 5 billion yuan ($704.50 million). The unsecured 3-year term loan facility marks the first debt financing in China by the automobile major. The banks that will provide the loan include Bank of China, ICBC, China Construction Bank, Bank of Communications and Shanghai Pudong Development Bank, Reuters reported.
It comes at a time when supply chains and sales of automakers have been negatively hit by the coronavirus pandemic. The loan facility "can help JLR China better manage cash flow amid the coronavirus epidemic", JLR's vice president and China chief financial officer Arthur Yu told reporters.
In May, JLR was said to be in talks with the UK government for an estimated one-billion pounds support package to tide through the coronavirus pandemic, according to British media reports.
Britain's largest carmaker had submitted a large bespoke loan package request to ministers in recent weeks, Dky News reported. The request is understood to be for temporary state funding, with the loan request lodged with the UK's Department for Business, Energy and Industrial Strategy (BEIS), which is headed by Indian-origin minister Alok Sharma.
JLR is constantly in discussion with the government on a whole range of matters relating to COVID-19 and we will not discuss details which are confidential and private, the company spokesperson had said. The company employs around 40,000 people, with the vast majority in the UK, and supports a large number of suppliers.