London, May 7: Tata Motors, the parent company of Jaguar Land Rover, has said that it will reject a British Government loan guarantee needed to save the troubled British carmaker.
A Sky News report said that Jaguar Land Rover received a final offer on a 450 million pound loan from the business department last week, but the Government wanted a 15 percent commission on the loan. A source close to the deal said: "What the Government was offering was not just a snub - it was a total insult."
A Tata Motors source told Sky News the company would reject the government deal over the onerous terms. The total rescue package involves loans of almost 800 million pounds, of which 340 million pounds is to come from the European Investment Bank and 450 million pounds from British banks underwritten by the Government.
In addition to the 15 percent rate, the Government is understood to want a veto power on the company's board, its own chairman and a say in future redundancies. But a government source dismissed suggestions the talks are close to collapse and said they want the firm to 'succeed', especially due to its strong environmental policies.