Jaguar Land Rover has secured over £550 million in loans from Chinese lenders, marking the first time the company has financed debt in China.
The 5 billion yuan deal with Chinese banks, including Bank of China, ICBC, China Construction Bank, Bank of Communications and Shanghai Pudong Development Bank, will be spread across three years as a revolving loan arrangement according to Automotive News Europe.
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Arthur Yu, the chief financial officer of Jaguar Land Rover China, said that the deal "can help JLR China better manage cash flow amid the coronavirus epidemic."
The deal comes as Jaguar Land Rover endures declining sales amid the global coronavirus pandemic. China usually accounts for around a quarter of the company's overall sales, but with most European and American showrooms closed amid the lockdown, for the last two months is has accounted for around half of the company's overall sales.
For the year overall Jaguar Land Rover is expecting Chinese sales to be level with last year's, or even grow slightly, despite the pandemic, which originated in China at the end of last year.
Life there has since slowly got back to normal while other key markets have been in lockdown. China's April sales matched last April, with there was growth in May.
In Britain Jaguar Land Rover is looking for a billion pound loan from the government as part of its emergency lending scheme, plus a further billion in subsidies and tax breaks. Those are figures that have been reported by Bloomberg and Sky News, but a spokesperson told the latter that the figure was "inaccurate and speculative," and that the final amount was still being worked out.
Tata Motors, which owns Jaguar Land Rover, is currently said to be seeking a strategic partner for its British business. Despite speculation, it is not looking to sell it though. According to recent market analysis Tata Motors is thought to be worth nothing without the British firm.