Land Rover banks future on inventory of spare parts
#1
08-10-2009, 05:54 AM
Land Rover banks future on inventory of spare parts
From The London Times
August 10, 2009
Land Rover banks future on inventory of spare parts
Robert Lindsay
Jaguar Land Rover, the motor manufacturer that is struggling to win government backing to refinance its debts, has secured a £75 million lifeline by mortgaging its stock of Land Rover parts.
The company, owned by Tata Motors, of India, has been granted a three-year debt facility of up to £75 million by Burdale Financial, Bank of Ireland’s finance division. The loan is secured on the inventory of Land Rover’s parts and accessories businesses in Britain and the United States, as well as its receivables — the amount that customers owe the company for spares. Since Land Rovers are famously durable and used for many years after manufacture, its spares business is a key driver of income.
Ken Gregor, finance director of Jaguar Land Rover (JLR) said: “We are pleased to have concluded this facility, which is an important element of our working capital financing arrangements.”
Tata Motors took out a $3 billion loan (£1.8 billion) to buy JLR from Ford in 2008 and has been striving to refinance the debt ever since. It first approached the Government about underwriting a refinancing in September. In May the manufacturer’s syndicate of 20 banks agreed to delay repayment demands for another year, partly thanks to a loan from Tata financed by a bond issue in India. Nevertheless, £200 million must be repaid by June 30 next year.
Tata now wants the Government to underwrite an £170 million commercial loan to secure the short-term survival of JLR. Executives from Tata and JLR are thought to have met officials from the Department for Business, Enterprise and Regulatory Reform just over a week ago to discuss the agreement.
The Government had demanded representation on the board of JLR and a veto on redundancies in return for loan guarantees. It is said to have dropped these conditions amid apparent growing support from a wider range of commercial banks.
Separately, JLR wants government guarantees for a £340 million loan offered by the European Investment Bank. This proposed loan is designed to help the company to adopt more fuel-efficient technologies and is not tied to its short-term survival.
JLR revealed at the end of June that it had slid £281 million into the red in the year to the end of March and that it might have to cut more jobs in addition to the 2,000 staff already laid off.
August 10, 2009
Land Rover banks future on inventory of spare parts
Robert Lindsay
Jaguar Land Rover, the motor manufacturer that is struggling to win government backing to refinance its debts, has secured a £75 million lifeline by mortgaging its stock of Land Rover parts.
The company, owned by Tata Motors, of India, has been granted a three-year debt facility of up to £75 million by Burdale Financial, Bank of Ireland’s finance division. The loan is secured on the inventory of Land Rover’s parts and accessories businesses in Britain and the United States, as well as its receivables — the amount that customers owe the company for spares. Since Land Rovers are famously durable and used for many years after manufacture, its spares business is a key driver of income.
Ken Gregor, finance director of Jaguar Land Rover (JLR) said: “We are pleased to have concluded this facility, which is an important element of our working capital financing arrangements.”
Tata Motors took out a $3 billion loan (£1.8 billion) to buy JLR from Ford in 2008 and has been striving to refinance the debt ever since. It first approached the Government about underwriting a refinancing in September. In May the manufacturer’s syndicate of 20 banks agreed to delay repayment demands for another year, partly thanks to a loan from Tata financed by a bond issue in India. Nevertheless, £200 million must be repaid by June 30 next year.
Tata now wants the Government to underwrite an £170 million commercial loan to secure the short-term survival of JLR. Executives from Tata and JLR are thought to have met officials from the Department for Business, Enterprise and Regulatory Reform just over a week ago to discuss the agreement.
The Government had demanded representation on the board of JLR and a veto on redundancies in return for loan guarantees. It is said to have dropped these conditions amid apparent growing support from a wider range of commercial banks.
Separately, JLR wants government guarantees for a £340 million loan offered by the European Investment Bank. This proposed loan is designed to help the company to adopt more fuel-efficient technologies and is not tied to its short-term survival.
JLR revealed at the end of June that it had slid £281 million into the red in the year to the end of March and that it might have to cut more jobs in addition to the 2,000 staff already laid off.
#2
08-10-2009, 06:01 AM
Since Land Rover owners are famously stubborn and use their vehicles for many years after manufacture, despite the cost in repairs, time away from family and grief received from jealous spouses, its spares business is more lucrative than the Colombian Cali cartel.
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