Jaguar Land Rover Rescue Talks On-Going

Fri, 08 May 2009

The government has confirmed that negotiations with Jaguar Land Rover aimed at rescuing the troubled carmaker are continuing despite reports that the talks were in trouble.

The Department of Business, Enterprise and Regulatory Reform (BERR) said the government is having confidential discussions with Jaguar Land Rover and its parent company Tata Motors Ltd on both short- and long-term financing .

A statement from the BERR said: "The government wants to see JLR safely through difficult trading times and to provide stability for the company and its employees. These negotiations are continuing."

It added: "Any government financial assistance must, of course, protect taxpayers' money . But on this basis we are prepared to help, although not on any terms."

A Jaguar spokesman commented: "We have always said the talks would be difficult but they are ongoing."

The comments come in response to media reports which claimed that financial support for Jaguar Land Rover from the European Investment Bank (EIB) was in danger of collapsing following a dispute over the terms of the loan .

The BBC said the British carmaker would not accept the tough conditions imposed by the government in return for guaranteeing the loan, including the right to veto power on the company's board, its own chairman and a say in future redundancies.

Discussions between the two parties centre on a rescue package that involves loans of almost £800m - a £340m approved loan from the EIB and £450m from British banks underwritten by the government.
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