AM Online

LDV in renegotiations for MBO

LDV has resumed talks with the Business Enterprise and Regulatory Reform (BERR) to discuss plans for a management buyout from Russian parent company GAZ.

The buy-out team, led by GAZ chairman Erik
Eberhardson, is set on transforming LDV into the first volume maker of electric vans in the UK.

The company had asked the Government for a bridging loan of £30 million, which was rejected. Both parties are now working hard to finalise some kind of support package. 

LDV has suspended production at its Birmingham factory since December because of falling sales and has admitted it has not made a profit for four years. 

Guy Jones, LDV marketing and PR director, said: “LDV has clearly made losses in the past, but since GAZ acquired the company it has been restructured as a lean manufacturing facility and has invested in new product.”

Jones said GAZ had invested more than £120 million since 2006, but couldn’t continue to pump funds in due to problems with the Russian market.

He said: “GAZ is offering to write off the investment and offer the business to a new owner who can complete the programme and bring the new models to market.”

Jones’ only message to reassure dealers was that the MBO team had “strong plans for the future of LDV”.

LDV has worked with the Department for Transport (DfT) to develop a range of EVV1 zero emission vans, chassis cabs and buses ready for large fleets, government authorities/councils and urban operators.

Jones said: “We now have four chassis cab vehicles in operation with a major supermarket chain and today our van demonstrator is being tested by London councils.”

The current vans on test typically have an 85-mile range and 55mph top speed (with a 1,400 kg payload on a chassis cab). Batteries can be charged fully in four hours, or up to 80% in two hours.

However, Jones said the configuration of range and charge time can be altered depending on businesses’ needs from their fleets.

When asked how long LDV could continue running without the funding for the MBO, Jones said: “The question should not be how long does LDV have before it fails, but what can be done to ensure it succeeds. We have a British business securing thousands of British jobs that has developed products to meet the Government’s vision of green automotive technology ready to go.

“The DfT has launched the low carbon procurement programme to source low and zero emission products for the public sector and we have the perfect product for this and also the private sector.”

LDV is directing dealers to its blog page – http://blog.ldv.com – which is updated daily by Jones on the latest developments with the company.

An industry analyst said: “The cynical view would be that LDV is jumping on the bandwagon to receive cash for green initiatives.”

The analyst said the main problems with LDV’s electric strategy came with pricing and servicing.

He said: “Electric vans will cost nearly double that of a normal van and do local authorities really have the money to spend?
“Electric vans also require very little servicing as there are hardly any moving parts. This would be a blow for van dealers as aftersales is their main source of revenue.”

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment

Comments

No comments have been made yet.