By Peter Wainwright
British Leyland has approached the Department of Industry for more help. Parliamentary approval for government loan guarantees of £50m was won last December when it was decided that Sir Don Ryder should prepare a report on the group.
The latest request was made a few weeks ago, and shareholders’ permission for the needed increase in group borrowing powers was sought by the board in a letter dated April 9. In this letter Lord Stokes, British Leyland chairman, recalls that the first £50m was only an interim measure. Since December motor industry recession and a month long strike at Castle Bromwich have led to a worsening in group finances. It is understood that British Leyland has spent only £10m of the £50m, largely as a result of the Castle Bromwich dispute whlich lost it 9,000 Minis and £10m in revenue.
The latest plea for help, like its forerunner, is designed to ensure that the group can continue to trade normally until the Government acts on Sir Don Ryder’s report and recomendations. If trading is not upset by further strikes or a worsening of the motor industry’s plight, the new facilities sought might not be needed. British Leyland’s board has still not seen the Rvder report, and does not knowv when it will. Sir Don Ryder will appear publiclv before the Commons Committee of Inquiry into the motor industry in three weeks time.
Lord Stokes; Mr John Barber, deputy chairman of Leylands, and managing director; Mr Alex Park, finance director, and Mr J. P. Lowry, labour relations director, appeared before the inquiry about six weeks ago. Just how much additional help British Leyland is seeking-and, more important, how much it will get,did not emerge yesterday. Both sides will want to assess the Budget. It is thought that the group’s application will take about three weeks to process, and any decision to grant further aid would need a parliamentary resolution.
The increase in borrowing powers to be sought from shareholders at an extraordinary general meeting on May 9 is from £390m to £520m. On March 21, group borrowings of all kinds were £327m, of which overdrafts made up £120m. Unused facilities, apart from the £40m left over from the December guarantee, were only £13m.
Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...
Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.