CHINA: Geely executive 'unaware' of London taxi cash injection talks
A senior executive at Geely Automobile Holdings has said he was unaware of talks on a possible cash infusion into struggling London taxi manufacturer Manganese Bronze Holdings.
Earlier reports had said Manganese Bronze was expected to discuss a cash injection with Geely, which owns around 20% of the taxi maker, because the British firm said it had no income stream for the foreseeable future after discovering a safety flaw in its new model.
Lawrence Ang, an executive director of Geely, told Reuters on Monday he was not aware of recent communication between the firms about that matter.
In 2006, Geely paid GBP53m (US$85.26m) for a 23% stake in Manganese Bronze and 52% of a Shanghai-based joint venture with the firm but, in 2008, took a charge of CNY100m ($15.96m) to write down that investment.
Manganese Bronze, which makes London black cabs, suspended trading in its shares on Friday and said its financial position was unclear after it discovered a safety defect in its new TX4 model that led to a recall and halt in sales.
"Geely is only a minority shareholder in the company and we have made provisions for the investment in our books years ago," Ang told Reuters.
"Our CEO and myself used to sit on Manganese Bronze's board but we've cut down to only one non-executive member now," he said.
Manganese Bronze, which has built more than 100,000 black cabs at its Coventry plant in Britain since 1948, turned to Geely in 2006 in response to high manufacturing costs which limited its growth.
It has reported losses since 2008, and sales of London-style taxis in China have failed to take off.
In the first nine months of this year, Geely sold only 710 Chinese-made black cabs, around 0.2% of its overall sales during the period, Ang told Reuters.
Geely, whose parent company also owns Volvo Car, now holds roughly 20% of Manganese Bronze, worth GBP610,000, according to Reuters calculations based on the British company's closing price of GBP0.10 per share on 11 October, its last trading day.
The traditional London cab has come under increasing competition from van-based models from automakers such as Mercedes-Benz, Citroen, Peugeot and Nissan which have developed van-based models to the strict standards set out for London cabs such as full wheelchair access, visual aids for the sight-impaired and five-passenger carrying capacity.