UK-Tatas face-off on JLR clouds Vista launch

On its part, Tata Motors has threatened to scrap the launch of Vista electric cars in the UK if it does not receive the £10-million loan soon, The Observer reported on Sunday. UK business secretary Lord Mandelson has warned the Tatas to accept a revised proposal to guarantee hundreds of millions of pounds in short-term funding or risk seeing it taken off the table, The Telegraph reported. Quoting people close to the situation, the report said, "... ministers were surprised that Tatas had not yet provided a response to the latest proposal''.

"The warning is understood to have been delivered by Lord Mandelson to Tata Motors in recent days following a fresh funding proposal that was made by the government earlier this month,'' the publication said in a report published online on Saturday. According to the newspaper, at stake is a government guarantee for € 340 million (£290 million) of European Investment Bank loans. Further, a separate short-term commercial loan of £200 million is also understood to be being negotiated by the company before a longer-term financing structure is established, it added.

However, The Observer report said, "The company is furious after being told by officials from (secretary of state for business, innovation and skills) Lord Peter Mandelson's business department that it needed more time to find out if the venture will be considered for the loan-taking the total wait to six months. In April, Tata Motors registered its EoI for the £10-million loan to help launch the Vista electric vehicle and build an assembly line for it in the UK. But last Tuesday, the company was told it will take another eight weeks for the government to decide whether it can be considered for the loan.