(This June 5 story officially corrects to say the loan facility is unsecured, not secured, after company clarified, paragraph 1)
SHANGHAI (Reuters) – Jaguar Land Rover (JLR), owned by India’s Tata Motors <TAMO.NS>, 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.
(Reporting by Yilei Sun and Brenda Goh; Editing by Muralikumar Anantharaman)