Jaguar Land Rover (JLR), after revealing the figures for its worst quarterly loss in the fourth quarter of 2018, has said that it’s seeking alternative funding because conditions aren’t right for it to borrow from the bond market, reports Automotive News Europe.

The luxury automaker needs to raise US$1 billion (RM4.07 billion) within 14 months to replace maturing bonds, and at the same time it has to funnel cash into a costly investment programme for electric cars. To support this, JLR could increase a receivables facility or turn to other bank financing, with other options including leasing assets and tapping export credit, treasurer Ben Birgbauer told the publication.

JLR’s owner Tata Motors shocked investors when it recently revealed the extent of the problems its UK arm is having in China. Sales of Jaguar sports cars and Land Rover SUVs dropped 35% in the world’s biggest auto market in the nine months to December 31, 2018, sending the unit to a US$354 million (RM1.442 billion) loss and knocking as much as 30% off Tata stock.

“Market conditions presently are less favourable in general and our bonds are trading below par, reflecting our recent financial performance,” Birgbauer said. “We have always said we monitor the debt market and look to issue debt when market conditions are more favourable.”

JLR recently posted RM17.9 billion in quarterly loss after it took a big write-down in the value of its cars and plants. The move was also part of a steep decline in demand for the automaker’s newest models, and it will also be slashing 4,500 jobs (10% of its workforce) as it responds to slowing sales. That’s on top of the 1,500 people who left the company in 2018. The measures will trigger a one-off charge of US$258 million (over RM1 billion) in the current quarter.

Several other factors contribute to its current predicament: a report by the UK business states that one major problem JLR faces in China is an ineffective dealer network. Only 18% of its outlets are in tier-one cities like Shanghai and Beijing, and more than one-third have been open for three years or less. The company now plans to overhaul the operation, cutting back on deliveries to reduce stock and investing in measures to boost its brand, logo and slogans.

In a conference call with its investors, JLR executives said it’s not possible to predict when China volumes will begin to recover, citing international trade tensions and how much stimulus the state chooses to provide as determining factors. JLR says it can still grow global sales in fiscal 2020 with the help of other markets and the launch of the new Range Rover Evoque.

Another factor concerning JLR’s weakening performance centred on the impact of Brexit, as well as government clampdown on diesel-powered vehicles in the UK, which is directly affecting sales of oil burner cars across brands in the market.