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LDV rescue deal collapses

LDV’s proposed buyer, Malaysia-based Weststar, has pulled out of the deal, forcing the van maker into administration.

Now PricewaterhouseCoopers, appointed administrator on Monday, will try to sell the Birmingham-based company, which could result in a break-up of the business.

Just last week Weststar had seemingly saved LDV, with production due to restart in July, but it was unable to secure the remaining investment needed to refinance the ailing van maker.

In a statement, Weststar said: “We had completed due diligence and had already invested significant resources to deliver this vision for LDV in Europe and Asia, but cannot continue to do this without confirmed access to the finance to secure the purchase.  

“Weststar has explored all known avenues to access this funding, including assistance from the Government, but without this in place, it is not possible to deliver the plan to secure jobs in the UK.”

In a final statement to its workforce, LDV said it hoped that any possible buyers recognised the potential and the investment already made at LDV and there was still “the opportunity of a bright future for LDV”.

LDV dealers have been waiting to be paid for warranty work and will now be among many creditors to lodge claims with PriceWaterhouseCoopers.

The LDV management team had made a final call to the Government to save LDV and put up the £60 million it needed to survive. LDV believed the cost of the company failing would total £53 million.

Professor Garel Rhys, automotive professor at Cardiff University business school, said: “There doesn’t appear to be any more out there to invest and I can’t see the Government coming to its rescue.

“The Maxus is a good product but it hasn’t made its way in the market. As a stand-alone company it has no chance.”
He said: “Dealers have a great ability to survive and I think they should now be preparing to look for alternatives to the LDV franchise.”

Motor retailers learned from the collapse of MG Rover that demand for service provided them with a chance to market themselves as specialists.

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