According to the media reports, Jaguar Land Rover owned by India’s Tata Motors has secured a loan of 5 billion yuan ($704.5 million) from China, making its first debt financing in China.
The loan is to ease the financial strains on the company due to the slowdown of the market amid Covid-19 crisis. The company has secured a term loan facility from China under a three-year revolving credit facility.
Arthur Yu, JLR’s vice president and China chief financial officer, said that the money had been secured from lenders including Bank of China, ICBC, China Construction Bank, Bank of Communications, and Shanghai Pudong Development Bank.
The company is also under financial stress and had already cut production at its Halewood facility even before the crisis began due to weaker sales, the Guardian reported.
JLR also suffered an 85% drop in sales in China last month as most dealerships shut due to COVID19.
JLR also has a partnership with a China-based Chery Automobile. In 2012, Jaguar Land Rover formed a 50:50 joint venture with Chery Automobile dubbed Chery Jaguar Land Rover for the production of Jaguar and Land Rover cars in China
Jaguar Land Rover has been a subsidiary of Tata Motors since they founded it for the acquisition of Jaguar Cars Limited and Land Rover from Ford in 2008. In 2013, the operations of both the companies were merged as Jaguar Land Rover Limited.