LDV rescued in a last minute deal by Malaysian Weststar Group

06 May 2009

The UK, Birmingham-based struggling van maker LDV, owned by Russian billionaire Oleg Deripaska's GAZ Group, has been rescued from going into administration; the UK government has given it a 'one-off' £5-million bridge loan to enable it to be acquired by Malaysian vehicle importer Weststar Group.

LDV, which employs about 850 people and supports another 5,000 jobs in the West Midlands, had said last week that it planned to file for administration today, but a last minute deal hammered out by the UK government and Weststar, has saved it from certain bankruptcy.

Government officials were making hectic efforts over the night to save the van maker from collapse although the UK government had earlier refused to provide it with an additional £20 million-£30 million bridging loan beyond the out £24 million already doled out to LDV at the time GAZ acquired it in 2006.

But a deal was put through only after the UK government agreed to give a one-off' £5 million bridge loan till the time Weststar is able to come up with the necessary finance and complete due diligence on LDV.

Weststar had formed an alliance with LDV in 2007 to market, assemble, distribute and service the full range of LDV Maxus light commercial vehicles in the 20 countries in Asia and the Middle East.

Last month, The Times reported that the UK government had approached M&M, the market leader in multi-utility vehicles in India, and another company based in the Far East to find out 'whether they were interested in acquiring LDV. (See: M&M to bid for UK van maker LDV)