The European Union’s finance arm, known as the European Investment Bank, has approved a loan for $458 million to Jaguar Land Rover’s parent company, Tata Motors. The loan will be used to finance the development of micro and full hybrids as well as research into more efficient car bodies for Jaguar Land Rover.
The EIB states that the loan is an eight-year amortizing loan, which was granted under the European Clean Transport Facility.
“This will support the progress of turnaround in Jaguar Land Rover’s business in challenging market conditions, alongside cost cutting measure, increase of volumes and the improved margins strategy currently being implemented by Jaguar Land Rover,” Ravi Kant, Tata Motors vice chairman, said.
Tata Motors said that this loan was the final piece needed in order to complete Jaguar Land Rover’s plans of strengthening their balance sheet. Jaguar Land Rover reported a loss of approximately $84 million during the third quarter of 2009, but closed strong with a $91 million profit for the fourth quarter, which Tata attributed to improving economic conditions and strong new models.
In 2009, Jaguar Land Rover increased sales by 68 percent for the year – moving 165,000 units. Jaguar Land Rover enjoyed much of the growth in the markets of Russia, Europe, North America and China.
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