British van maker LDV, owned by Oleg Deripaska’s GAZ Group, has warned that it will have to call in administrators within days if it does not get a loan from British taxpayers, but the government stuck to its view that its Russian parent should bail it out.
LDV, which employs more than 2,000 workers, asked the British government for ?4 million to ?5 million on Tuesday as a bridge loan ahead of a planned management buyout.
A company spokesman said Friday that in the absence of the cash, the buyout was now off the table, but there was still interest from two unidentified Asian investors if the government would only tide it over. “GAZ cannot give LDV any more money,” the spokesman said, though he added that the firm was unlikely to collapse over the weekend.
The British government said it would talk to the two investors over the weekend but that there was no evidence that either had a firm business plan.
“LDV has told us of two potential investors from overseas companies, but there is no evidence they have committed to the company,” said a spokesperson at the Department for Business, Enterprise and Regulatory Reform. “We are contacting these two potential investors today and over the weekend to find out more information about their level of interest in LDV.”
A source close to the situation said neither overseas investor had begun due diligence work and that the government would be reluctant to put any money on the line without assurances that jobs would remain in Britain.
The government’s long-held position is that further funding should come from the van maker’s parent company, not the public purse. “Our position remains that GAZ, not taxpayers, should provide the funding for the company’s transition,” a spokesman for Prime Minister Gordon Brown told reporters.
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