London - India's Tata Motors said it no longer needed UK guarantees on loans for its Jaguar Land Rover (JLR) unit as it had secured private funding and was close to finding a commercial backer for a European Investment Bank (EIB) loan.
The British government has been holding talks with Tata and JLR on guaranteeing short-term and long-term loans.
The talks centred on a rescue package that involved a 340-million pound approved loan from the EIB, to be used for the development of environmental technologies, and 450 million pounds from British banks, underwritten by the government.
Media reports quoted industry experts in May as saying the talks were stalled because the carmaker would not accept the tough conditions imposed by Britain in return for guaranteeing loans, including the right of the government to veto management decisions.
Tata said in a statement issued on Tuesday that it had concluded many funding facilities from commercial banks, with the balance expected to be completed in the coming weeks.
It also said it expected the long-term EIB loan to be secured shortly through commercial arrangements.
"With the positive trend in the external environment in financial markets and improvement in general liquidity, these arrangements have been and are expected to be concluded without necessitating guarantees from the UK government, for which discussions had been ongoing for some time," Tata said in a statement.
Tata would not give any further details and JLR was not immediately available for comment.
The UK government also issued a statement saying that Tata had secured private sector funding.
"This additional funding will allow JLR to invest in future models and successfully launch the new XJ saloon on schedule and updated Land Rover models later this year," UK Business Secretary Peter Mandelson said in the statement.
"The government had offered bridging finance from the automotive assistance programme if necessary. We understand the Tata group will now be successful in resolving longer term financial needs but we are willing to help again if necessary."
Britain pledged in January to guarantee up to 2.3 billion pounds of loans, including 1.3 billion pounds from the EIB, to help its ailing car industry cope with a slump in demand.
More than 14 000 workers are employed at Jaguar Land Rover's five British sites. Tata bought Jaguar and Land Rover from Ford in June last year for about $2.3 billion.
Shares in Tata Motors, which has a market value of $3.8 billion, closed up 6.8% at 428.25 rupees on the Bombay Stock Exchange.