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A few days after posting huge financial losses, Jaguar Land Rover is currently looking to raise $ 1 billion over the next 14 months.
The liquidity injection will allow the company to replace maturing bonds and invest in its new range of electric cars, whose development is currently proving expensive. Jaguar Land Rover could also turn to other bank financing, leasing badets according to Automotive News in Europe.
"Market conditions are currently less favorable in general and our bonds are trading below normal, which reflects our recent financial performance," said treasurer Ben Birgbauer by phone. "We have always said that we are watching the debt market and looking to issue debt when market conditions are more favorable."
Last week, Jaguar Land Rover reported losses of £ 3.4 billion (US $ 4.38 billion at current exchange rates), following a 35 percent drop in sales in China, which is currently the largest automotive market in the world. It is also downsizing by about 10% (corresponding to about 4,500 jobs) as a result of its turnaround plan.
According to BloombergJaguar Land Rover's 4.5% bonds, which expire in January 2026, dropped to 77 cents against the euro, which equates to a return of around 8.9%. The automaker still has an unused credit facility of £ 1.9 billion ($ 2.45 billion) and £ 2.5 billion ($ 3.2 billion) in cash, according to figures published by the owner Tata Motors.
Jaguar Land Rover's ability to recover from its difficulties in China is crucial for its recovery, but the company does not know when sales in this country will begin to recover. Its network of dealers in China appears to be inefficient, with only 18% of its exhibition halls located in leading cities such as Beijing and Shanghai.
To help solve the problems, the country will reduce deliveries to prevent dealers from having too many stocks. He will also work on branding and marketing.
In addition to China, Brexit has also been at the center of Jaguar Land Rover's struggles.
As a result, Royal London Asset Management has already reduced its exposure to the company due to "Brexit-specific risks and their ability to maintain access to capital markets," said Global High Yield Manager Azhar Hussain.
Source: News from the automobile
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