Tata Motors has secured the £1 billion of funding it needs in order to purchase Jaguar Land Rover from Ford, reports claimed yesterday.
The move is expected to lead to a formal announcement of the deal next week.
The reports said that Tata had signed a deal to receive a $3 billion (£1.5 billion) one year bridging loan from banks Citigroup and JPMorgan, the latter of which claimed world headlines on Monday for its purchase of collapsed US investment bank Bear Stearns.
The loan is expected to provide the Indian company with the money it needs to pay Ford as well as providing important working capital, which it may pledge to JLR or use to help with the manufacturing costs associated with the production of its show-stealing micro-car, the Nano.
As well as being good news for Tata, the loan is also an indication that despite the current crisis in the financial markets, US banks are still prepared to lend money to Asia.
Despite the risk, it is thought the Indian firm could raise up to £2 billion on domestic and overseas debt markets, based on its previous good performance.
However, it still faces a tough debt market as the global financial crisis has raised the premiums demanded by investors, especially from riskier Asian issuers.
Standard & Poor placed Tata Motors on review in January for a possible downgrade, citing the potential increase in its debt load from the acquisition.
Meanwhile, Unite union negotiator Dave Osborne said his members were reasonably happy with the deal, which has seen Tata pledge to keep production of the two marques in the UK and promise to maintain engine supply agreements Ford.
Mr Osborne also said that as part of the deal Ford would boost pension plans to the tune of £300 million. It is thought that following acquisition Jaguar will opt to follow Porsche's sales strategy of selling fewer cars with higher profit margins.
The move means a U-turn on the policy implemented by Ford when it decided to produce the X-Type in an attempt to make Jaguar a volume manufacturer.
The policy has never been successful and has led to years of losses and under performing sales.