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Will they won't they

LONDON, May 6 (Reuters) - The British government said on Wednesday that negotiations with luxury carmaker Jaguar Land Rover on guaranteeing financing are continuing despite reports that the talks were in trouble.
The Department of Business, Enterprise and Regulatory Reform said the government is having having confidential discussions with Jaguar Land Rover and its parent company, India's Tata Motors (TAMO.BO: Quote, Profile, Research), on both short- and long-term financing.

"These negotiations are continuing," it said in a statement.

"Any government financial assistance must, of course, protect taxpayers' money. But on this basis we are prepared to help, although not on any terms," it added.

The BBC said on its website that financial support for Jaguar Land Rover from the European Investment Bank (EIB) was in jeopardy after a dispute over the terms of the loan.

Quoting industry experts close to the talks, it said the carmaker would not accept the tough conditions imposed by the British government in return for guaranteeing the loan, including the right to veto management decisions.

Sky News said the talks were "close to collapse."

A spokesman for Jaguar Land Rover could not immediately be reached for comment.

Britain pledged in January to guarantee up to 2.3 billion pounds ($3.47 billion) of loans, including 1.3 billion pounds from the EIB, to help its ailing car industry cope with a slump in demand.

In its statement, the Department of Business, Enterprise and Regulatory Reform said the "primary financing responsibility" for Jaguar Land Rover lies with Tata.

"We have been actively encouraging them for the last six months to put together a long-term funding package," it said.

"In parallel, we have been talking to banks on their behalf, have appointed financial advisers to assist and we are prepared to guarantee loans from the European Investment Bank on the right terms," it said. ($1=.6631 Pound)

Post #5434 6th May 2009 7:34pm
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