European Investment Bank loan of GBP 340 million for Jaguar Land Rover

Tata Motors today announced the completion of a GBP 340 million loan from the European Investment Bank (EIB) to Jaguar Land Rover.  The facility is an 8 year amortizing loan to finance development of micro and full hybrid drive trains and research into more energy efficient car bodies for the premium car segment by Jaguar Land Rover. These activities will contribute to lower CO2 emissions and the loan was granted under the European Clean Transport Facility.

The loan is structured with guarantee support from banks, with Credit Suisse working in the lead with Jaguar Land Rover and Tata Motors in arranging the structure.  State Bank of India played a key role in the facility, providing a guarantee along with Bank of India and Bank of Baroda.  Credit Suisse, Standard Chartered Bank, Deutsche Bank and JP Morgan are providing additional guarantees to meet EIB credit requirements.

Mr. Ravi Kant, Vice Chairman of Tata Motors, said: “We are very happy with the support extended to us by the European Investment Bank, State Bank of India, Credit Suisse, and other banks. This will support the progress of turnaround in Jaguar Land Rover's business in challenging market conditions, alongside cost cutting measures, increase of volumes and the improved margins strategy currently being implemented by Jaguar Land Rover. We view Jaguar Land Rover as a key part of Tata Motors and we feel confident about its outlook for the future.”

The EIB loan completes the last major element of the funding plan for Jaguar Land Rover, which has been an important part of Tata Motors’ efforts to strengthen its group balance sheet over the past year. In 2009, the company secured over £500 million of funding for Jaguar Land Rover, including facilities from State Bank of India, Standard Chartered Bank, Bank of Baroda, ABC International bank, GE Capital, and Burdale Financial Limited, a subsidiary of the Bank of Ireland.

Moreover, despite the very difficult financial environment since June 2008 when Jaguar Land Rover was acquired, Tata Motors had, by October 2009, completely repaid the USD 3.0 billion bridge finance facility for the acquisition of Jaguar Land Rover, through a combination of Rights Issue in 2008, issue of long maturity Non-convertible Rupee Debentures, internal cash flows, sale of investments, and issue of Global Depository Shares and Convertible Notes in October 2009.