Fleet News

LDV seeks finance deal as production lines stop

VAN maker LDV is believed to have clinched a crucial refinancing deal that will allow it to restart building vehicles after its production lines were stopped.

The company is in talks with an American private equity group, although no deal has yet been announced.

It recently stopped its production lines until surplus stocks of vehicles had been sold but the move caused concern that the company was facing a cash crisis.

Newspaper reports over the weekend suggested that company bosses had been locked in talks with an American venture capital group to secure new finance.

It was reported that extra funding would be used to support its future model programme.

The company employs more than 1,000 people at its Washwood Heath factory in Birmingham.

Bosses claim that production lines were stopped as a temporary measure aimed at rebalancing new vehicle stocks and to train staff.

A spokesman said the initial plan was to start production of two new Maxus models – a minibus and a chassis cab conversion – towards the end of next year but that any refinancing deal would bring production forward by six months.

LDV has grown since chief executive Allan Amey led a management buy-out of the vans division of Leyland DAF in April 1993. In recent years, the company said, it had invested £40 million in new facilities, including a £30 million state-of-the-art paint plant. The company and its backers, venture capital groups 3i and European Acquisition Capital and bankers Barclays and Lloyds TSB, have invested £500 million over recent years in product development.

Its new Maxus van has won a number of awards and recently won large fleet deals with Royal Mail for 250 vehicles and with Home Delivery Network for 750 vans. The manufacturer announced that in September it had achieved its highest individual sales month for four years, selling 1,493 vehicles during the month.

One national newspaper reported that sources at LDV suggested the company had suffered from the effects of MG Rover’s collapse, with suppliers caught out when it went into administration having now tightened their credit terms to limit the risk of other losses.

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