Automobile major Tata Motors has refuted media reports which claimed that the company may sell its stake in Jaguar Land Rover (JLR), saying that it categorically denies and dismisses any such intent.
"Jaguar Land Rover is and remains a key pillar of Tata Motors and the wider Tata Group. Jaguar Land Rover business remains strong as it transitions to new electrified, autonomous and connected technologies to support its Destination Zero ambition,” the company said in a statement.
Speculations of a stake sale arose after a former director of Tata Steel and Tata Motors said that with the European operations of both JLR and its British steel plant draining the finances of their parent companies, the group will have to devise a solution soon.
“I will not rule out a stake sale in JLR and a complete sale of the UK steel operations. The talks with ThyssenKrupp for merger of Tata Steel’s European operations is also taking a lot of time – which can be very bad news,” he said.
The financial condition of Tata Motors-owned JLR is dire as the British subsidiary has reportedly lost one billion pounds in the first 6 months of this year and the coronavirus pandemic has further resulted in reduced sales.
The Tata Group had initiated talks for a stake sale even before the pandemic struck, but nothing concrete came through.
JLR, which has 30,000 employees in the UK, had asked for a financial package from the British government as part of its effort to help local companies. The talks, however, failed as the UK government set stiff conditions.
Just before the pandemic, global brokerage firm Bernstein had said that JLR could fetch a valuation of 9 billion pounds for Tata Motors after news reports emerged in foreign media that BMW is interested in acquiring a stake in JLR.
Tata Motors added, “We recently announced our results for Q1 and have indicated that we are maintaining solid liquidity despite the Covid-19 pandemic and expect to be cash positive from Q2 onwards.”