Reducing the carrying value also has an upside, and that would be the saving of £300 million per year in depreciation and amortization. Then there’s the pre-tax loss without the one-off exceptional item mentioned in the previous paragraph, accounting for £273 million.
It doesn’t sound like a lot, but don’t forget Jaguar Land Rover posted a £90 million pre-tax loss in the previous quarter. Through the “Charge and Accelerate” turnaround programs, JLR wants to save in the ballpark of £2.5 billion. Of that figure, approximately £1 billion will be saved from investments.
Given this lengthy explanation, what’s the next step for Jaguar Land Rover moving forward? According to Automotive News, that would be $1 billion in funding.
Expected to get that money in the next 14 months, JLR looks to “issue debt when market conditions are more favorable” according to treasurer Ben Birgbauer. That sounds a bit optimistic considering the 35-percent sales slump in China and the 4,500 jobs that will be lost in the restructuring process.
Adding insult to injury, Brexit-specific risks convinced Royal London Asset Management to cut back its ties with the British automaker. Depending on how the United Kingdom breaks away from the European Union, access to financial markets might become a problem too.
JLR still has £2.5 billion of cash and £1.9 billion of undrawn credit facility according to the latest figures published by Tata Motors. Looking at the bigger picture, Jaguar Land Rover has to replace management staff with more competitive personnel or be more considerate to business aspects such as ROI (return on investment).
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