Tata Motors shares jump as JLR bags $2B government loan
What's the story
Tata Motors' shares have witnessed a surge today after Jaguar Land Rover (JLR), its subsidiary, secured a £1.5 billion ($2 billion) loan. The loan is privately financed and guaranteed by the UK's export credit agency, UK Export Finance. The financial aid is aimed at easing the strain on JLR's suppliers and facilitating a phased restart of operations after JLR was hit by a cyberattack in August, which forced it to shut down production and IT networks.
Operational impact
Production halt and potential losses
The cyberattack has forced JLR to extend its production halt until next month. The Financial Times reports that the company could face a £2 billion hit since it wasn't insured against the cyberattack. This loss could wipe out its entire profit for FY25. On Friday, Tata Motors' shares rose by 1.45% to ₹673.95 apiece after JLR announced a phased restart of operations.
Financial strategy
UK government backs loan for JLR
The UK government has confirmed that JLR will repay the £1.5 billion loan over five years. The money was arranged through a commercial bank and is backed by UK Export Finance. This financial strategy comes as part of broader efforts to support suppliers affected by the recent cyberattack, which disrupted operations and delayed payments at JLR.