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Report: Jaguar Land Rover to receive Tata cash boost

  • Story Highlights
  • Tata bought the British-based luxury car maker earlier this year
  • UK government also pondering a public-funded bailout of the company
  • JLR employs around 15,000 workers in Britain
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LONDON, England (CNN) -- The Indian owners of car manufacturer Jaguar Land Rover (JLR) have agreed to pump "tens of millions" of dollars into the luxury car brand to prevent a cash flow crisis, it was reported Monday.

Jaguar

Jaguar Land Rover was bought by the Indian company Tata earlier this year for $2.3 billion.

The moves comes as the British government ponders a public-funded bailout of the West Midlands-based automaker, the Financial Times newspaper said.

Tata, which bought JLR earlier this year, warned its support for the UK subsidiary did not negate the argument that the British government should provide bridging loans and credit guarantees to help the company and the car sector as a whole through the current financial difficulties, the FT said.

Last week, the ailing "big three" automakers in the U.S. were given a boost when the Bush administration agreed a $13.4 billion loan package. Now British Business Secretary Lord Mandelson has come under pressure to come up with a similar package for UK manufacturers.

JLR employs 15,000 workers in Britain and is seen as a vital contributor to the West Midlands regional economy in particular.

However, the business secretary at the weekend reiterated that the state had to be a "lender of last resort," only after Tata has looked to its own resources, the FT reported. Any state support would be conditional on the due diligence on the Indian parent company being conducted by the government's City advisers, according to officials.

A spokesman for Lord Mandelson's Department for Business, Enterprise and Regulatory Reform told the British Press Association: "The Government doesn't have an open cheque-book to bail out ailing companies, but we are doing all we can to help businesses overcome the current challenges.

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"Jaguar Land Rover have owners who are well resourced and have the first responsibility to sustain the companies they own."

According to the FT, accountancy firm KPMG and investment bank NM Rothschild have been called in to advise the UK government on the Indian group's complex finances and to assess demands from the car sector.

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