Jaguar Land Rover Seeks £2 Billion Lifeline to Tide Over Cyberattack

Core Viewpoint - Jaguar Land Rover (JLR), owned by Tata Motors, is raising £2 billion ($2.7 billion) in loans from global banks to alleviate financial strain caused by a cyberattack that halted production [1][3]. Group 1: Funding Details - The foreign currency facility will be priced at approximately 110 basis points over the secured overnight funding rate (SOFR) [2]. - Citigroup, Mitsubishi UFJ Financial Group, and Standard Chartered Bank have agreed to provide the 18-month credit facility, with potential syndication to more banks later [2]. - This funding comes in addition to a £1.5 billion loan guarantee from the UK government to support cash reserves and the supply chain affected by the cyberattack [6]. Group 2: Operational Impact - The cyberattack has severely disrupted operations at JLR, affecting plants in the UK, Slovakia, Brazil, and India, leading to chaos in the auto supply chain [7]. - JLR is currently working to clear a backlog of payments owed to suppliers as it navigates through the operational challenges [7]. - Some systems have been restored, allowing JLR to process supplier invoices and expedite parts distribution, with plans to restart some manufacturing operations on October 1 [8]. Group 3: Financial Context - The funding requirement arises just months after JLR achieved its goal of becoming net debt-free, indicating a significant shift in financial strategy due to unforeseen circumstances [4]. - Automotive suppliers typically operate on thin margins and require high working capital, making them vulnerable to disruptions like the one JLR is facing [4].