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Jaguar gets 500m new bank funding

BELEAGUERED carmaker Jaguar Land Rover (JLR) yesterday revealed it has secured &pound;500m of new funding, easing the pressure on the company after a dramatic slump in car sales during the recession.<br /><br />JLR, which is owned by India&rsquo;s Tata Motors, said the monies included a &pound;175m loan from the State Bank of India and a new $90m (&pound;56.6m) committed export financing facility with ABC International Bank.<br /><br />The remaining funding has been stumped up by Standard Chartered, Bank of Baroda and Burdale Financial, a subsidiary of the Bank of Ireland.<br /><br />&ldquo;We are pleased our funding plans are progressing and appreciate the confidence shown by our banking partners in our business,&rdquo; JLR chief financial officer Kenneth Gregor said in a statement.<br /><br />JLR, which employs 14,500 people in the UK, said last month it would no longer need financial support from the government after agreeing private funding arrangements.<br /><br />Tata chairman Ratan Tata said in a letter to business secretary Lord Mandelson that he hoped the funding would help the group &ldquo;succeed in re-establishing these venerable British brands to their earlier glory&rdquo;.<br /><br />The news comes after the company last month announced plans to merge two of its three car plants in the West Midlands by 2014, as part of a cost-cutting drive to help reverse the impact of the economic crisis, which has seen sales plummet as consumers shy away from big-ticket purchases.<br /><br />In August, Tata said JLR posted a pre-tax loss of &pound;62m over the first quarter of the year, while sales at the business fell around 52 per cent compared to the first quarter of last year.<br /><br />Tata originally snapped up JLR last year from its previous owner Ford for around $2.3bn. Ford, the only one of the three major US carmakers to avoid being bailed out by the state in the recession, said it was forced to sell up to concentrate on its loss-making core US operations.