Press Report : Weststar lining up bid to buy LDV out of administration
John Cranage, Birmingham Post, 9th June, 2009
The tangled story of crashed vanmaker LDV took a new twist when it emerged that Malaysian company Weststar was bidding to buy the Birmingham business out of administration.
Weststar precipitated the lastest crisis last week when it pulled out of a last-ditch deal that could have seen the company, which had debts of more than £75 million, continue as a going concern, saying it had failed to raise the necessary finance.
More than 800 jobs were lost yesterday after an application by LDV’s Directors for an administration order was granted by Judge Purle QC at Birmingham County Court. As many as 4,000 jobs in total are believed to be at risk as the impact of the collapse ripples through LDV’s suppliers.
Within hours of yesterday’s court order, which included subsidiary company Birmingham Pressings Limited, Administrators Rob Hunt and Mark Hopkins, of PricewaterhouseCoopers, had made 810 of the Washwood Heath company’s 850-strong workforce redundant, leaving a skeleton staff of 40 to maintain the Bromford Lane site.
Other potential bidders were not named but are understood to include Indian engineering group Mahindra & Mahindra, also previously a potential buyer of the business as a going concern, and a Chinese company.
No vans have been made there since December and the factory was yesterday virtually deserted and the gates to its carparks and grounds were locked. “Sadly, we don’t have the funds to keep the employees on,” Mr Hunt said outside LDV’s offices yesterday afternoon.
The Administrators said they had been approached “by three parties wishing to engage with us” and confirmed that one of them was Weststar, which had a joint venture with LDV to ship Maxus van kits to Malaysia where they were assembled for sale in Far Eastern markets.
Other potential bidders were not named but are understood to include Indian engineering group Mahindra & Mahindra, also previously a potential buyer of the business as a going concern, and a Chinese company. Mr Hunt and Mr Hopkins ruled out a revival of the failed bid by LDV’s management to buy the business out from its Russian owner, GAZ Group.
Chairman Erik Eberhardson, who led the MBO bid, is understood to be working on another project for GAZ Group in Russia and to be no longer connected with LDV. The status of the company’s Russian chief executive, Evgeniy Vereschagin, was not known last night.
This is a bitter blow for manufacturing and the West Midlands region in particular. However, LDV has been in a vulnerable situation for many years and today’s sad announcement is not due to any lack of effort by either Unite or the Government to find solutions. Tony Woodley, Joint Leader of Unite
Tony Woodley, Joint Leader of Unite, said: “This is a bitter blow for manufacturing and the West Midlands region in particular. However, LDV has been in a vulnerable situation for many years and today’s sad announcement is not due to any lack of effort by either Unite or the Government to find solutions. We must now redouble our efforts to give the beleaguered manufacturing industry the help it needs.”
A spokesman for GAZ Group said: “This is a sad day for the LDV workforce, suppliers and British manufacturing. Over the last few months, we have fought relentlessly to find a solution.”
A number of organisations, including Birmingham City Council and Advantage West Midlands, have set up the LDV Taskforce to help employees and suppliers. It can be contacted free on 08000 730 440.
[Source: Birmingham Post]
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