Shanghai: Jaguar Land Rover (JLR), owned by India`s Tata Motors , has entered into agreements with lenders in China for an unsecured 3-year term loan facility of 5 billion yuan ($704.50 million), marking its first debt financing in China, it said.
Arthur Yu, JLR`s vice president and China chief financial officer, said the Chinese banks that would provide it with the three-year revolving loan include Bank of China <601988.SS>, ICBC <601398.SS>, China Construction Bank <601939.SS>, Bank of Communications <601328.SS> and Shanghai Pudong Development Bank <600000.SS>.
The fundraising comes as the coronavirus pandemic has hit global automakers` supply chains and sales. Sales from China used to account for 25% to 30% of JLR`s global sales, but over the past two months make up 50%, Yu said.
The loan facility “can help JLR China better manage cash flow amid the coronavirus epidemic”, Yu told reporters on Friday.
JLR, which imports cars and also has a manufacturing partnership in the Chinese eastern city of Changshu with Wuhu-based Chery Automobile [CHERY.UL], said its China sales in April were level with same period last year, and it saw sales growth in May.
Yu said the company expects sales of China`s luxury car segment this year to be level with last year or see slight growth.