Tata Motors on Monday rejected the "stiff" terms and conditions of a proposed UK government loan for its cash-strapped UK subsidiary Jaguar Land Rover, saying it no longer requires this as it has secured a £75 million debt facility from a private bank for its working capital arrangements.
Tata Motors has secured a three-year loan of £75 million for JLR from Bank of Ireland's UK finance arm, Burdale Financial Limited by mortgaging the stock and receivables of its Land Rover brand in the UK and the US.
Britain's business secretary Peter Mandelson welcomed the development, saying, "The fact that the banks and commercial capital markets are meeting JLR's funding is a clear sign of confidence in the company, its products and the automotive sector."
Tata Motors chairman Ratan Tata, who had earlier said in a TV interview to Sky News that the UK government is not interested in the manufacturing sector, said in a letter to Lord Mandelson that the funding would help in re-establishing these old British brands to their earlier glory.
The chief financial officer of JLR, Ken Gregor, said in a statement, "Jaguar Land Rover is pleased to have concluded this facility which is an important element of our working capital financing arrangements."
Another spokesperson for JLR said that the carmaker is no longer discussing or seeking loan from the UK government from its £2.3 billion automotive assistance scheme announced in January. (See: Britain unveils 2.3-billion pound loan for car industry)