UK Government agrees £5m bridging loan to prevent LDV from collapse
by Kay Murchie
Struggling van maker LDV, owned by Russian oligarch Oleg Deripaska, has been thrown a lifeline by the UK Government after the company has been provided with a £5 million bridging loan, in order to avoid administration and save hundreds of jobs.
The bridging loan paves the way for Malaysian vehicle importer and contract manufacturer, Weststar, to take over the beleaguered van maker.
Production has been on hold at LDV since December and staff have been informed that they might not be paid from this week, however, the latest announcement suggest that jobs might be saved.
Furthermore, the announcement will bring some much-needed good news to the car industry, which has severely hit by the global economic downturn.
A spokesperson for LDV told the BBC: “This is not the end of the process but it is very good news for everybody.
“This is a significant step. This is the Government getting involved, which we’ve asked them to do for a long time.
“It is important to stress this is not a deal being done but they are going to provide assistance for a deal to be completed, added the spokesperson.”
Along with 800 jobs at LDV, and the 1,200 people working in van dealerships, thousands of other indirect jobs could have been lost if a deal had not been reached.
The Unite union were said to be “delighted at the Government’s backing for this company”.
Earlier this year, LDV sought financial assistance from the Government after it said it was “literally running out of cash”.
LDV has a long-term partnership with Weststar after signing an alliance two years ago to make LDV commercial vehicles in Malaysia.
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Tags: adm, bridging loan, collapse, Government, Jobs, LDV, Malaysia, takeover, Weststar
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badly distorted. The £5m loan is to buy time for a due diligence between the proposed buyer to takeover the business. it isn’t a lifeline for jobs as the deal is likely to fall through.
Comment by Dan — May 6, 2009 @ 9:20 pm