The sale of British vanmaker LDV to Malaysian partner Weststar has been agreed, a company spokesman has confirmed.
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LDV marketing director Guy Jones told the BBC this afternoon the deal would secure production in Birmingham, although he could not guarantee all jobs would be saved.
The UK government is to provide a GBP5m four-week bridging loan to allow time for the takeover to be completed and, earlier today, moves to put LDV into administration were adjourned for a week at a court hearing.
Jones told the state broadcaster the deal would take another couple of weeks to finalise and no date had been set for production to restart – LDV’s 800 staff have not built any vehicles since before Christmas last year.
Weststar has been assembling LDV’s vans in Malaysia since 2007 and sells them in south east Asia and the Middle East. It also operates a chain of Honda car dealerships in Malaysia.
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By GlobalDataLDV had been due to go into administration at the court hearing on Wednesday but the court heard that its Russian owner Gaz had sold its stake in the firm to Weststar. It will report on the progress of the deal to the court on 13 May.
Jones told the BBC the moves were “a significant development for LDV and a major step towards an exciting new future for the company”.
But he added: “We cannot stand here today and guarantee the jobs. The marketplace will determine how many jobs are required.”
Earlier, GAZ Group’s press office told Russian news agency Prime-Tass it had signed an agreement to sell LDV to Weststar.
The UK government had provided the GBP5m loan guaranteed by Weststar to support LDV’s operations while the transaction was processed, GAZ Group said without disclosing the value of the deal.
Negotiations between Weststar, LDV and UK government officials continued into Tuesday night to finalise the deal, the BBC reported earlier.
The chief executive of the Society of Motor Manufacturers and Traders, Paul Everitt, told the broadcaster the rescue deal was a vote of confidence in the industry.
“I think it does signal that there are now investors out there taking a longer term view and they see the UK motor industry as being a good investment – an industry that has a strong future, particularly one that is already ahead and embracing the low carbon agenda,” he said.
The UK government has made it clear the aid is a one-off bridging loan which would not be extended.
In February, LDV had asked the government for a bridging loan because it was “literally running out of cash” but the government said the taxpayer could not be expected to pay for the company’s losses though talks with LDV were “ongoing and regular”.
LDV was put up for sale by its Russian owner Gaz late last year.
The government had said repeatedly that any further funding for LDV should come from GAZ, Russia’s second largest car producer, which is controlled by entrepreneur Oleg Deripaska and has been hard hit by a slump in domestic sales.
LDV last month asked the government for a bridging loan before a planned management buyout (MBO) which would have been led by GAZ chairman Erik Eberhardson.
“I am very pleased that a deal has been put in place after the intensive discussions over the weekend,” Eberhardson said in a statement.
The management buyout had planned to relaunch the company as a specialist in electric vehicles.
