JAGUAR Land Rover (JLR) has been in talks with the government for weeks to secure a loan of £2bn, to prevent mass sackings following a drop in sales during the coronavirus pandemic.
JLR, which is owned by India’s Tata Motors, has seen sales plunge by more than 30% in its most recent quarter.
A spokeswoman admitted that it is in ‘regular discussion with government on a whole range of matters’.
She added: ‘The content of our private discussions remains confidential.’
A spokesman for the Department for Business, Energy and Industrial Strategy said: ‘We recognise the challenges facing the industry as a result of coronavirus and firms can draw upon the unprecedented package of measures, including schemes to raise capital, flexibilities with tax bills and financial support for employees.’
JLR has taken advantage of the government’s Coronavirus Job Retention Scheme and around 18,000 of its UK workers remain furloughed.
The Coventry-based company employs 40,000 people globally.
In its most recent results for the period to 31 March, JLR said it had £3.6bn in cash and investments as well as an undrawn credit facility of £1.9bn.
However, that position has changed for the worse in the intervening seven weeks.
JLR’s facilities have been shut since the end of March, although last week it restarted some production at its Solihull plant and at its engine-making site in Wolverhampton.
Credit rating agency Standard & Poor’s recently estimated that JLR will burn through £1bn in cash each month following the shutdown of its facilities and if ‘severely reduced production’ continues over the next financial year.
JLR said sales of its vehicles fell by 30.9% in the three months to the end of March compared to the same period last year.
It said the coronavirus pandemic had ‘significantly’ impacted sales.