Chery Automobile is negotiating a RMB6bn (US$951m) loan with banks for its joint venture with Tata Motors' Jaguar Land Rover (JLR), according to a report from China.

Sources told Reuters  the two companies were seeking regulatory approval for the Rmb17.5bn venture, to be based in Changshu, Jiangsu province. The companies will proceed with the loan when the JV gets the approval, they added.

Meanwhile, the report added, Qoros Auto, Chery's first JV with a foreign company, Israel Corp, is seeking a Rmb3bn 10-year loan for its factory construction project.

Also located in Changshu, the 50-50 JV has instructed Export-Import Bank of China to lead the loan and several major state-owned banks are going through internal credit assessment to join the deal, sources said.

The loan is offering a margin of at least 100% of the PBOC rate, according to a source. It repays after a three-year grace period, which is equal to the factory's construction period, the source said.

Both shareholders will be guarantors of the deal, while the loan is secured by all the assets of the factory construction project.

The deal is expected to close in mid-May.

Established in 2007, Qoros Auto, once known as Chery Quantum Auto, launched its first car brand, Qoros, last November. The brand will go on sale in 2013 in China and western Europe, a market the Chery brand will enter later this year.

Qoros staff includes former BMW/Mini chief designer Gert Hildebrand, Reuters reported last November.

Sources told the news agency the Changshu factory needed total investment of Rmb7bn and the company website said the plant would have an initial production capacity of 150,000 vehicles a year.

Construction of the factory's main buildings will be finished by June, before the assembly line is installed, and the factory would be production-ready to produce cars by the end of this year.