LDV set to fall as government refuses to grant £30 million bridging loan

LDV set to fall as government refuses to grant £30 million bridging loan


Last night the Government decided against giving a taxpayer-funded £30 million bridging loan to struggling, Birmingham-based van maker LDV.

The Business Department of Downing Street has stated that it is the responsibility of Gaz, the parent company, to rescue the ailing firm. The Government also noted that LDV has still failed to pay back a £24 million loan given four years ago.

The head of Gaz, Erik Eberhardson, has said that LDV would only last a few more days without emergency funds, effectively putting 6,000 jobs at risk. The firm employs 900 people in Birmingham, but supports a further 5,000 in related industries.

LDV suspended production in December of last year after sales plummeted. It was bought by Gaz, the Russian automotive company belonging to oligarch Oleg Deripaska, for about £50 million three years ago.

Mr Eberhardson said: “Gaz’s revenues have dropped 78%. It continues to believe in LDV but can no longer support it. The recession has hit very hard in Russia.”

He went on to say that with the bridging finance, LDV had planned to become the first UK manufacturer of electric vans: “LDV can be a symbol of the low carbon, green manufacturing future that the government says it wants Britain to lead. We are almost ready to go, but we need the government to do its bit.”

The Business Department commented: “The British taxpayer cannot be expected to pay for the company's losses in the absence of the owners assuming their responsibilities.”


Leave a comment