JLR begins talks with global banks for $1.3 billion five-year loan; some lenders flag Tata Sons leadership uncertainty

Mumbai: Tata Motors-backed Jaguar Land Rover has begun talks with global banks to raise about 1 billion through a five-year term loan, but uncertainty surrounding the leadership of the Tata Group could weigh on lenders' decision-making, people familiar with the matter said.

JLR began discussing its fundraising plans with eight or nine banks last week, the people said. During the discussions, some lenders suggested that the company delay the fundraising until greater clarity emerged over the continuity of N Chandrasekaran as chairman of Tata Sons, the group holding company.

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Chandrasekaran is also chairman of JLR, prompting lenders to seek greater visibility on his continuity before committing to the financing, the people said.

Lenders are evaluating the proposed financing in the context of the level of parental support available to JLR, the people said. Their concerns over leadership stem from Tata Trusts chairman Noel Tata's opposition to the Tata Sons board decision granting a five-year extension to group chairman Chandrasekaran.

The automaker, however, is confident that it will be able to raise the funds, as developments at its parent group do not have a direct bearing on its operations, people familiar with the matter said.

The proposed term loan is likely to carry a fixed spread over the sterling overnight index average (SONIA), people said. The pricing is expected to be well within 200 basis points over SONIA, they added. JLR has approached banks including HSBC, Citibank, MUFG, DBS and BNP Paribas as part of fundraising discussions, as per the people.

The Tata Group did not comment. Citi declined to comment, while HSBC, MUFG, DBS and BNP Paribas did not respond to ET's emailed queries. Talks are progressing on matter and there has been no impact of any leadership uncertainty on the matter, top executives close to the matter said.

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"Tata group has never been impacted by such issues in the domestic or global markets," one of the executives said. In March, JLR indefinitely postponed a proposed 500 million senior unsecured bond issue due to volatility in global markets following the US attack on Iran.

At the time, JLR planned to use the net proceeds for general corporate purposes, including the likely repayment of 500 million of the 1 billion drawn from a 2 billion bridge facility put in place in September 2025 during the cyberattack on JLR, and to refinance notes due in January 2026 and November 2026, as per the March 18 statement from S&P Global.