UK-based van maker LDV has been placed into administration by a court after attempts to sell it as a going concern failed.
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Talks with a potential buyer, the Malaysian firm Weststar, recently broke down and left LDV to apply for administration last week.
In addition to the direct workforce of 850, LDV employs 1,200 people in dealerships and is a major customer for local suppliers.
The Washwood Heath plant has been at a near-standstill since before the end of 2008 during the search for a new owner to replace GAZ.
Weststar had agreed a deal to acquire the company from its Russian owners, with the aim of restarting production in July.
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By GlobalDataThe UK government pledged a GBP5m four-week loan until the deal was sealed, after the firm said it intended to maintain production at the Birmingham plant.
However, Weststar pulled out at the last minute.
In a statement issued today, LDV thanked its workforce and partners for their support.
“Firstly the management team want to thank our employees, dealers, suppliers, business partners and Liam Byrne MP for their support, enabling us to try to secure a future for this important British business,” LDV said.
LDV’s management also held out the hope that there could still be a bright future for LDV.
“We now hope that any possible buyers recognise the potential of the investment already made at LDV and what has been achieved in the last year to transform the future profitability of the business. There is still the opportunity of a bright future for LDV, however now the management team must now hand control of the business over to the administrators and hope this can be achieved in this process.”
The statement signed off: “All further communication about LDV will now come from the administrators.”
Alastair Beveridge, a partner at restructuring experts Zolfo Cooper, told just-auto that he wasn’t surprised to see LDV in administration.
“It was always a small player and has been in this situation before and still struggled to be viable afterwards,” he said. “There’s a limit to how much time and money can be spent on a firm like LDV that is simply failing to successfully compete with much bigger and stronger van manufacturing groups.”
However, Beveridge doesn’t discount the possibility that previously interested parties may return to the table now that the assets are in the hands of administrators.
“It is possible that Weststar, or another firm, may take a look at what’s on offer and conclude that they can acquire assets cheaply and, for example, ship the tooling to a low-cost destination and restart manufacturing there. In that scenario they would clearly be operating without the LDV workforce and skill base but they may nevertheless feel that the low-cost environment could make it work,” he said.
