The European Investment Bank (EIB) and Tata Motors today signed a loan agreement for the European Investment Bank to provide a GBP 340 million loan to Jaguar Land Rover. The facility is an 8 year amortizing loan to finance development of micro and full hybrid drive trains and research into more energy efficient car bodies for the premium car segment by Jaguar Land Rover. These activities will contribute to lower CO2 emissions and the loan was granted under the European Clean Transport Facility.

The loan is structured with guarantee support from banks, with Credit Suisse working in the lead with Jaguar Land Rover and Tata Motors in arranging the structure.  State Bank of India played a key role in the facility, providing a guarantee along with Bank of India and Bank of Baroda.  Credit Suisse, Standard Chartered Bank, Deutsche Bank and JP Morgan are providing additional guarantees to meet EIB credit requirements.

Mr. Simon Brooks, European Investment Bank Vice President responsible for lending operations in the United Kingdom, said: “The EIB is pleased to be able to work closely with Tata Motors and Jaguar Land Rover to make a lasting contribution to automotive research that will enable the production of more environmentally friendly and energy efficient vehicles at a time of significant challenges for the European car industry.”

Mr. Ravi Kant, Vice Chairman of Tata Motors, said: “We are very happy with the support extended to us by the European Investment Bank, State Bank of India, Credit Suisse, and other banks. This will support the progress of turnaround in Jaguar Land Rover's business in challenging market conditions, alongside cost cutting measures, increase of volumes and the improved margins strategy currently being implemented by JLR. We view Jaguar Land Rover as a key part of Tata Motors and we feel confident about its outlook for the future.”

The EIB loan completes the last major element of the funding plan for Jaguar Land Rover, which has been an important part of Tata Motors’ efforts to strengthen its group balance sheet over the past year. In 2009, the company secured over £500 million of funding for Jaguar Land Rover, including facilities from State Bank of India, Standard Chartered Bank, Bank of Baroda, ABC International bank, GE Capital, and Burdale Financial Limited, a subsidiary of the Bank of Ireland.

Moreover, despite the very difficult financial environment since June 2008 when Jaguar Land Rover was acquired, Tata Motors had, by October 2009, completely repaid the USD 3.0 billion bridge finance facility for the acquisition of Jaguar Land Rover, through a combination of Rights Issue in 2008, issue of long maturity Non-convertible Rupee Debentures, internal cash flows, sale of investments, and issue of Global Depository Shares and Convertible Notes in October 2009.

Commenting on the overall financing efforts being made by Tata Motors, Mr. C. Ramakrishnan, Chief Financial Officer of the Company, said: “We have taken significant steps to meet our financing requirements and strengthen our balance sheet over a short timeframe in challenging and adverse market conditions. We are thankful to have received the support of Tata Sons, all investors and relationship banks.  The business performance of our Indian and international operations have improved significantly and we feel comfortably positioned for the future.”

Background information:

About European Investment Bank
The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union.  The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States.  The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives.  The EIB continuously adapts its activity to developments in EU policies.  Besides supporting projects in the Member States, its main lending priorities include financing investments in future Member States of the EU and EU Partner countries. The Bank’s consistent AAA rating is underpinned by firm shareholder support, a strong capital base, exceptional asset quality, conservative risk management and a sound funding strategy.

About Tata Motors
Tata Motors is India’s largest automobile company, with consolidated revenues of Rs.70,938.85 crores (USD 14 billion) in 2008-09.  Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain.  Among them is Jaguar Land Rover, the business comprising the two iconic British brands.  It also has an industrial joint venture with Fiat in India.  With over 4 million Tata vehicles plying in India, Tata Motors is the country’s market leader in commercial vehicles and among the top three in passenger vehicles.  It is also the world’s fourth largest truck manufacturer and the second largest bus manufacturer.  Tata cars, buses and trucks are being marketed in several countries in Europe, Africa, the Middle East, South Asia, South East Asia and South America.

About Jaguar Land Rover
Jaguar Land Rover is a business built around two great British car brands that design, engineer and manufacture in the UK, Jaguar Cars Limited, founded in 1922, is one of the world’s premier manufacturers of luxury saloons and sports cars.  Since 1948 Land Rover has been manufacturing authentic 4 x 4s that define ‘breadth of capability’ in their segments.  The Jaguar XF, XJ and XK models are manufactured at the company’s Castle Bromwich plant in Birmingham.  Land Rover’s Defender, Discovery 4, Range Rover Sport and Range Rover models are all built at the Solihull plant, while the Land Rover Freelander 2 is manufactured at the Halewood plant in Liverpool.  The Jaguar Land Rover business employs some 14,500 people, predominately in the UK, including some 3,500 engineers at two product development centres in Whitley, Coventry and Gaydon, Warwickshire.  The business is a major wealth generator for the UK with 78 percent of Land Rovers exported to 169 countries and 70 percent of Jaguars exported to 63 countries, with sales to customers conducted principally through franchised dealers and importers.

About European Clean Transport Facility
The European Clean Transport Facility (ECTF) is a major European Investment Bank financing programme approved by the Economic and Financial Affairs Council of the European Union (ECOFIN) on Dec 2, 2008 to support investments targeting research, development and innovation in the areas of emissions reduction and energy efficiency in the European transport industry. The ECTF provides up to EUR 4bn per year and targets automotive (manufacturers/suppliers), railroad, aircraft and shipping industries. It is primarily designed to enhance the investment capacity of corporate borrowers in support of eligible investments.