Tata Motors denies it plans to sell its stake in Jaguar Land Rover
Tata Motors has denied reports it plans to sell its stake in Jaguar Land Rover after talks with the government to secure a rescue package broke down.
Talks with the carmaker and Tata Steel, which are both owned by the Indian conglomerate Tata Group, broke down after the Treasury concluded the group did not qualify for taxpayer support.
The emergency scheme, dubbed Project Birch, imposed strict conditions on any lending which resulted in reports claiming Tata might sell its stake in the carmaker.
In a statement today, Tata Motors said the reports it would sell its stake in Jaguar Land Rover were “uncomfirmed and unsubstantiated”.
“Tata Motors categorically denies and dismisses any such intent. Jaguar Land Rover is and remains a key pillar of Tata Motors and the wider Tata Group.”
It said Jaguar, which has struggled since the outbreak of coronavirus, remained “strong as it transitions” to new technologies. Tata Motors, which last year reportedly approached firms about partnership opportunities with Jaguar, said it was maintaining liquidity despite the pandemic.
It said it “expects to be cash positive” from the second quarter onwards.
Jaguar Land Rover, which employs more than 30,000 in the UK, lost close to £1bn between January and July. It sought significant financial support but was excluded from the Bank of England’s finance support scheme because of its poor credit rating.
The Treasury has previously made clear that the government would only act to rescue individual companies if their failure could disproportionately harm the economy. The Chancellor said firms that had exhausted other options, which includes raising capital from existing investors, would be eligible.
In June, Jaguar’s Chinese subsidiary raised £560m from a group of Chinese banks.