LDV rescue deal falls through, hundreds of jobs at risk

02 June 2009 14:14  [Source: ICIS news]

LONDON (ICIS news)--UK-based van manufacturer LDV has applied for administration after Malaysian group Weststar pulled out of a proposed government-backed rescue deal, the company said on Tuesday.

On 6 May it was reported that the government had offered a £5m ($8m, €6m) bridging loan to facilitate a proposed acquisition from Weststar, which would have maintained the ailing Birmingham-based firm's liquidity. 

The company’s 850 employees would now be at risk of redundancy, along with thousands more jobs connected with LDV’s supply chain.

“The application for administration will be in court this morning and further information will be made available as soon as the facts behind this are clear,” LDV said in a statement.

Demand for commercial vehicles in the UK has fallen dramatically over the past year, but LDV had long-running problems and has made a loss for the past four years.

The global economic downturn has had a major effect on the automobile industry, which is an end-market for suppliers of chemicals, rubber and plastics.

Since 2006 the firm - formerly Leyland DAF Vans - has been owned by Russia's Gaz Group, controlled by Oleg Deripaska.

($1 = €0.71, €1 = £0.86)

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By: Mark Watts
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