UK van maker LDV goes back into administration

09 June 2009

The struggling UK van maker, the , Birmingham-based LDV has been put back into administration after Malaysian vehicle importer Weststar Group failed to raise the necessary finance to buy the stricken van maker.

The administrators PriceWaterhouseCoopers (PwC) said yesterday that they would sadly have to lay off the vast majority of the 850 LDV workers since there are no funds to keep the employees on.

The Weststar Group rescued LDV, owned by Russian billionaire Oleg Deripaska's GAZ Group, from going into administration last month, after the UK's Department of Business Enterprise & Regulatory Reform gave it a one-month £5-million bridge loan until it was able to raise the finance from the market to acquire LDV. (See: LDV rescued in a last minute deal by Malaysian Weststar Group)

Although Weststar had asked the UK government for a £45-million bridge loan, the government refused to give additional funds since it had already provided £24 million to LDV at the time GAZ acquired it in 2006.

LDV applied at the county court for administrators to be appointed again yesterday even as managers made a final £60 million loan appeal to the government on Friday saying that around 850 jobs at LDV and another 3,200 jobs at suppliers' and distribution network were at risk.

LDV, which has not built any vans since December last due to a drastic slump in sales and paid about £1 million as part of its employee's insurance contribution., told the UK government that by closing its factory, the UK Treasury would stand to lose approximately £53 million in unemployment benefits and lost taxes in the first year.