Tuesday, January 4, 2005

Jaguar seeks capital boost from owner Ford

Reuters

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LONDON - Luxury British car maker Jaguar said on Tuesday it expected a further injection of capital from its owner Ford Motor Co. after reporting heavy losses for 2003.

Jaguar said took a 534 million-pound ($1.02 billion) charge to cover a writedown on the company's investments after losing 601.1 million pounds in 2003, double the previous year.

The previously-undisclosed figure, lodged with regulators late last month, left Jaguar with a "negative net worth" of 322 million pounds, a Jaguar spokesman said, confirming a Financial Times report.

"The Jaguar business was recapitalised in 2003 and a programme of future recapitalisation has been agreed," the spokesman said.

The writedown, reflecting Jaguar's plans to scale back production after worse-than-expected sales, would only impact Jaguar's UK accounts and would not impact U.S.-based Ford's earnings.

The spokesman refused to comment on how the recapitalisation would be carried out. The FT said one option would be for Ford to convert some of the 490 million pounds Jaguar owes to other Ford companies into equity.

Jaguar announced plans last year to cut 1,150 jobs as it scales back production and shifts car production from a plant in central England to a second factory.

Ford bought Jaguar in 1989 for 1.6 billion pounds. Jaguar has been unable to keep pace with larger rivals in the premium car sector amid a slump in U.S. car sales.

Jaguar Chief Executive Joe Greenwell said in November the brand would lose hundreds of millions of pounds this year and not break even until 2007.