Press Report : Tata cash crisis adds to JLR woes
Bill Condie, Evening Standard, 12th January, 2009
Tata Motors faces a debt crunch with a $3bn (£1.98bn) loan due that will add new intensity to its bid for a UK taxpayer injection for its Jaguar Land Rover division.
The Indian carmaker needs to raise cash by June to repay a bridge loan taken to fund last year’s purchase of the British marques from Ford, leading one Indian analyst to raise the drastic possibility of selling off the British marques it has owned for less than a year.
Tata paid $2.3bn for Jaguar and Land Rover but the timing of the deal was disastrous, just before the credit crunch roiled global markets and caused credit to evaporate. It is caught with both collapsing sales at Jaguar and Land Rover in the US and Europe and plummeting demand for cars and trucks in India.
Tata admitted it calculations on the Jag deal had changed. ‘In view of the significantly changed business environment, Jaguar Land Rover’s requirements have increased beyond the original plan,’ spokesman Debasis Ray said.
Mahantesh Sabarad, an analyst at Centrum Broking in Mumbai, said ‘Urgent action is required to support the UK car industry.’ He added that the crisis could lead Tata to look for a buyer for Jaguar and Land Rover. Tata has told the government it needs help of about £1bn.
[Source: Evening Standard]