February 2009 Car News - GBCarLoans.com

23rd February 2009

Van maker LDV told there's no more cash.

LDV has asked the government for a bridging loan because it is "literally running out of cash". The government has told ailing van maker LDV that the taxpayer cannot be expected to bail out the firm, after it asked for £30m in loans. LDV has made a loss for four years. Sales fell after it suspended production in December. Thousands of jobs are at expected to be lost, 900 of which are based in Birmingham.

A Government spokesperson said that talks with the firm were "ongoing and regular" and being conducted by Business Minister Ian Pearson.

Erik Eberhardson, who is the outgoing Gaz chairman (Gaz is the Russian parent firm) hopes to lead a management buy-out of the firm, but he said he believes the situation is critical. LDV is not producing and so revenue is not being made, the cash is literally running out. Eberhardson believes the company need £20-30m, depending on how it is structured. Some staff at LDV have been sent home in recent weeks

LDV HISTORY
Part of state-owned British Leyland (pictured) in the 1970s
Bought by Dutch firm DAF in 1987
Became independent firm LDV in 1993 after a management buy-out
2005 - bought by private equity group Sun Capital
2006 - purchased by Russian company GAZ

The management buy-out of the firm aims to make it into the first big producer of electric vans in the UK. Mr Eberhardson belives it needs to happen immediately. Liam Byrne, Labour MP for Birmingham Hodge Hill, stated that LDV's plans for a management buy-out are an excellent sign of faith by the... leaders in the company. HE said "For some weeks now I have been working closely with the company as they have shaped their ambitious plans for winning a big share of the 'green van' market."

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