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Coronavirus: Jaguar Land Rover in talks over government loan Coronavirus: Jaguar Land Rover in talks over government loan
(32 minutes later)
Jaguar Land Rover (JLR) is in talks with the government to secure a loan of more than £1bn, following a drop in sales during the coronavirus pandemic.Jaguar Land Rover (JLR) is in talks with the government to secure a loan of more than £1bn, following a drop in sales during the coronavirus pandemic.
According to reports, the carmaker has been in discussions for weeks about a support package.According to reports, the carmaker has been in discussions for weeks about a support package.
JLR, which is owned by India's Tata Motors, has seen sales plunge by more than 30% in its most recent quarter.JLR, which is owned by India's Tata Motors, has seen sales plunge by more than 30% in its most recent quarter.
A spokeswoman said JLR is in "regular discussion with government on a whole range of matters".A spokeswoman said JLR is in "regular discussion with government on a whole range of matters".
She added: "The content of our private discussions remains confidential."She added: "The content of our private discussions remains confidential."
While the exact size of the loan is not yet clear, JLR said suggestions that the carmaker is seeking as much as £2bn is "inaccurate and speculative".While the exact size of the loan is not yet clear, JLR said suggestions that the carmaker is seeking as much as £2bn is "inaccurate and speculative".
A spokesman for the Department for Business, Energy and Industrial Strategy said: "The government is in regular contact with the car manufacturing sector to assist them through this crisis.A spokesman for the Department for Business, Energy and Industrial Strategy said: "The government is in regular contact with the car manufacturing sector to assist them through this crisis.
"We recognise the challenges facing the industry as a result of coronavirus and firms can draw upon the unprecedented package of measures, including schemes to raise capital, flexibilities with tax bills and financial support for employees.""We recognise the challenges facing the industry as a result of coronavirus and firms can draw upon the unprecedented package of measures, including schemes to raise capital, flexibilities with tax bills and financial support for employees."
JLR has taken advantage of the government's Coronavirus Job Retention Scheme and around 18,000 of its UK workers remain furloughed.JLR has taken advantage of the government's Coronavirus Job Retention Scheme and around 18,000 of its UK workers remain furloughed.
The Coventry-based company employs 40,000 people globally. The Coventry-based company employs 38,000 people in the UK.
However, the company does not qualify for the joint Treasury-Bank of England Covid Corporate Financing Facility aimed at large businesses, which requires that firms must be "investment grade rated".However, the company does not qualify for the joint Treasury-Bank of England Covid Corporate Financing Facility aimed at large businesses, which requires that firms must be "investment grade rated".
This shows a company's credit worthiness and whether it is at a low or high risk of defaulting on its debts.This shows a company's credit worthiness and whether it is at a low or high risk of defaulting on its debts.
In its most recent results for the period to 31 March, JLR said it had £3.6bn in cash and investments as well as an undrawn credit facility of £1.9bn.In its most recent results for the period to 31 March, JLR said it had £3.6bn in cash and investments as well as an undrawn credit facility of £1.9bn.
It is not known how much that position has changed in the intervening seven weeks.It is not known how much that position has changed in the intervening seven weeks.
JLR's facilities have been shut since the end of March, although last week it restarted some production at its Solihull plant and at its engine-making site in Wolverhampton.JLR's facilities have been shut since the end of March, although last week it restarted some production at its Solihull plant and at its engine-making site in Wolverhampton.
Credit rating agency Standard & Poor's recently estimated that JLR will burn through £1bn in cash each month following the shutdown of its facilities and if "severely reduced production" continues over the next financial year.Credit rating agency Standard & Poor's recently estimated that JLR will burn through £1bn in cash each month following the shutdown of its facilities and if "severely reduced production" continues over the next financial year.
JLR said sales of its vehicles fell by 30.9% in the three months to the end of March compared to the same period last year. It said the coronavirus pandemic had "significantly" impacted sales.JLR said sales of its vehicles fell by 30.9% in the three months to the end of March compared to the same period last year. It said the coronavirus pandemic had "significantly" impacted sales.
JLR's request for a taxpayer-backed loan was first reported by Sky News.JLR's request for a taxpayer-backed loan was first reported by Sky News.