Brit bailout pledge helps Tata find cash to keep Jaguar Land Rover afloatDecember 22nd, 2008 - 1:32 pm ICT by ANI
London, Dec 22 (ANI): A planned British government bailout worth tens of millions of pounds to keep Jaguar Land Rover afloat has helped the companys owners, Tata, to secure extra funds.
Tata found the cash because its banks were convinced that the Government would prevent a collapse, a source said. Officials had been working on the details of the package over the weekend.
Prime Minister Gordon Brown had decided to intervene to prevent the collapse of the carmaker and was preparing to announce a short-term bailout package soon, The Times reported.
But a combination of tough rhetoric in public and private reassurance appears to have helped the Tata Group to secure enough cash to postpone the bailout until after Christmas.
A state package worth hundreds of millions of pounds will be negotiated in the New Year to save a firm claimed by its Indian owner to be of key strategic importance to Britains economy.
The Tata Group, which is headed by Rana Tata, told ministers that it was facing a cash flow crisis and needed help to pay suppliers. It said that it feared that it might not be able to pay several significant bills falling due today.
Over the weekend Lord Mandelson, the Business Secretary, said: The Government cannot be a first call for help in these circumstances. The owners have to look to themselves and their own resources.
He added: If there is anything that the government can appropriately do for any such company, then it will have to meet and pass some pretty tough tests.
According to senior Whitehall figures, however, the Brown Government had already privately agreed that short-term assistance was almost certainly necessary, the paper said.
Jaguar Land Rover employs 15,000 in the Midlands and Merseyside and sustains tens of thousands more jobs through its suppliers and research and development facilities. (ANI)
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