Tuesday, August 11, 2009

Jaguar Land Rover would not require government’s bailout funding

On August 11, 2009 Jaguar Land Rover, the British automaker told the U.K government that it does not require the bail out money as the company was able to collect necessary funds from bank. Tata Motors, the owner of the brand, was able to obtain fund worth $561 million from European Investment Bank. It has been more than a year, since Tata Motors acquired the company from Ford Motor Company for $1.7 billion. Due to world wide economic recession, both the JLR and Tata Motors came under serious pressure. Due to falling car sales, the JLR cut down production at its three main manufacturing plants in the U.K. On the home front, Tata Motors also suffered heavily from falling car sales.

British government offered to give financial support but the deal was not finalized as there were disagreements regarding the terms and conditions between the two parties. Lord Mandelson, U.K. business secretary played a key role in the financial deal between European Investment Bank and Tata Motors. This is a good sigh for the economy because it is showing that the credit crunch is ending and investors have now become confident about investments.

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