Talks to save Jaguar Land Rover (JLR) were on the brink of collapse last night in a row over conditions the Government want to impose in a rescue package.
Both sides are insisting that the talks are still ongoing at its Halewood plant, although owners, Tata Motors are understood to be refusing to accept the terms the Government want to impose on the loan.
Senior strategist at BGC Brokers, Howard Wheeldon, said he believed the conditions included restrictions on the Governments willingness to underwrite a £340M loan offered by the European Investment Bank (EIB) which would help partly finance the development of new greener cars.
It is also thought that demands include Tata invest millions of pounds more into JLR on top of the £940M it has already promised since taking over the company from Ford last year.
Ministers are also said to be demanding high level management control, including the right to choose a chairman and veto board decisions.
Howard Wheeldon described the government’s demands as “backdoor nationalisation” after the government said it would only guarantee £175m of £340m in loans to JLR approved by the EIB and for only six months. He also claimed the government demanded payment of a 15% premium for its role. With the Government backing, JLR would then have access to a further £450M in commercial bank loans.
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