Tata Motors Ltd is in talks with State Bank of India (SBI) for a counter-guarantee to the guarantee it is seeking from the UK government on a loan for its Jaguar and Land Rover (JLR) unit.
Tata Motors is seeking loans from the Citibank NA and Standard Chartered Bank Plc to develop new cars. The banks have sanctioned the loan on the condition that it has to be supported by a guarantee from the UK government. The UK government, in turn, wants a counter-guarantee from SBI.
It has been revealed that the SBI has agreed to give a counter-guarantee to the UK government.
"We are in discussions with the UK government on the loan guarantees and, hopefully, we will find a solution for it...and our funding plan for JLR will progress," Tata group chairman Ratan Tata had told Reuters after launching JLR in Mumbai on 28 June.
Tata had also said that if there was a large financial package from the UK government for JLR, then "there should be commensurate level of representation from them (the government)", which had to be negotiated and worked out.
In the first quarter that ended in June of the fiscal year 2010, the company reported a net profit of Rs 513.78 crore. Operating profit (profit from core operations) as a percentage of sales was 11.4, some 4.3 percentage points higher over a year ago. The quarterly earnings, however, did not include numbers for JLR.