Chery Jaguar JV may be preparing plan to finance new automobile factory

Gasgoo.com (Shanghai March 6) - Reports have been circulating that Chery and Jaguar Land Rover are planning a financial plan for their new joint venture. According to a report appearing in China Business News today, the ten year plan will involve raising 3.9 billion yuan ($621.11m) to finance the preliminary work on a new automobile factory. Chery officials have yet to confirm or deny the news.

The report cites an anonymous source in the banking industry as confirming that the Industrial and Commercial Bank of China has already prepared the plan on behalf of Chery and Jaguar Land Rover. The Bank of China and China Exim Bank may also participate. The details of the plan are still being ironed out, with the Chery Land Rover joint ventures potentially using its capital assets as mortgage. Whether parent companies Chery or Jaguar Land Rover will vouch for their JV is another question.

The source also mentions that the JV may arrange for another plan to finance second-phase construction work for their new factory.

The 10.9 billion yuan ($1.74b) Chery Jaguar Land Rover JV is owed equally by Chery and Jaguar's parent company Tata Motors. The JV's first automobile factory, which will boast an annual production capacity of 130,000 vehicles, is expected to begin operation in 2014. The JV also plans to establish both a joint research and development center and an engine factory in the country.