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Jaguar Land Rover has secured a new £2bn funding facility from commercial banks as “a liquidity backstop” as the British carmaker said it planned to resume manufacturing this week after a month-long shutdown caused by a devastating cyber attack. 

According to three people with knowledge of the discussions, Standard Chartered Bank, Citigroup and Mitsubishi UFJ Financial Group have agreed to offer the emergency credit line to JLR, which is fully owned by India’s Tata Motors. 

The arrangement, requested over a week ago, is separate from a £1.5bn loan guarantee JLR received from the UK government over the weekend to support its supply chain.

The 18-month £2bn facility has been priced at an investment grade level of 100 basis points over the secured overnight financing rate going up to about 145bp over the period of the loan. One person added that the credit line was “more a liquidity backstop” because of the lingering level of uncertainty surrounding JLR’s operational recovery.

JLR’s £2bn loan arrangement was first reported by India’s Economic Times.

“They will still need some hand-holding over the short term,” said Pramod Amthe, head of research at Mumbai-based InCred Group.

The £1.5bn guarantee by government agency UK Export Finance will cover another commercial loan split between HSBC and MUFG, according to two people close to the situation.

Citi, MUFG, Standard Chartered, HSBC, Tata Motors and JLR declined to comment.

JLR has been unable to resume production since the August 31 attack, putting at risk the jobs of about 200,000 workers in the company’s sprawling supply chain. 

In a statement on Monday, JLR said it had informed retailers and suppliers that “some sections” of its manufacturing operations would resume in “the coming days. Last Thursday, the company also restarted some of its computer systems in an attempt to accelerate payments to its cash-strapped suppliers.

Despite cross-party support for the state guarantee, some critics have questioned why JLR or Tata Motors could not have secured the loan from commercial banks without the government’s backing. 

Under the export development guarantee scheme, UK Export Finance will cover up to 80 per cent of the risk on the commercial bank loan to JLR, which will need to be paid back over five years. 

The government’s loan guarantee was “specifically aimed at ensuring that the suppliers do not get stressed on account of this incident at JLR”, one person with knowledge of the discussions said. The primary objective was to ensure the suppliers were protected and did not feel stress on their working capital, the person added.

During the production halt, JLR has still been able to sell new cars but it has had to register them manually. The partial system restart allowed JLR to help clear the backlog of its payments to suppliers, but its supply chain continues to be under pressure until production is fully resumed.

The loan guarantee was the fastest option to secure additional liquidity for its suppliers, said a person close to JLR.

JLR accounts for just over 70 per cent of Tata Motors’ annual consolidated revenues and its exposure is aggregated in Tata Group. The UK government’s latest involvement in the carmaker’s predicament has increased scrutiny on the support provided by its Indian owner. JLR last month appointed PB Balaji, the finance boss of Tata Motors, as its new chief executive.

In a letter addressed to the UK’s Business and Trade Select Committee last week, Balaji said JLR was in a “good position” to secure additional short-term liquidity, adding that Tata Motors was “committed to taking the necessary steps to meet its ongoing commitments to our retail and supply partners”.