Treasury, Mandelson mull loan guarantee to JLR: report

The Treasury and the Business Secretary Lord Mandelson are considering to grant a loan guarantee of several hundred million pounds to Tata owned luxury car marque Jaguar Land Rover (JLR), a media report says.

"It is understood that Mandelson and the Treasury are considering granting a loan guarantee of several hundred million pounds to Jaguar," the Sunday Times said.

This guarantee would allow JLR to raise bridging finance from commercial banks would be made available for around 18 months, the report added.

Mandelson last week held fresh talks with Ratan Tata, Head of the Indian Tata business empire that owns JLR.

Ratan Tata and JLR executives had stressed the company's sizeable research and development programme during their interview with Mandelson.

JLR spends 400 million pound a year and plans several new models next year, including a new XJ saloon and the first of several hybrid vehicles.

Mandelson, is expected to make loan guarantees available to the finance arms of car companies in an attempt to kick-start sales. Another option is for low-cost loans to be made from the 400 billion pound set aside to support the banking industry, the Sunday Times added.

The newspaper further added that the details of a European Investment Bank scheme to help the industry are expected to be finalised this week. Low-cost loans would be made available to support investment in fuel-efficient cars.