Geely in U-turn for cab maker
20th October 2010
Taxi. The meter is running and the Chinese are ready to do a complete U-turn and take control of Manganese Bronze.
Shares of the black cab manufacturer were unchanged in the rank at 31.25p. But whispers suggest 20 per cent-shareholder Geely, China's largest privately-owned carmaker and owner of Volvo Cars, is on the verge of paying around 35p a share in cash to take control of the Coventry-based company.
Geely apparently wants to tie up a deal before Prime Minister David Cameron visits China next month to meet president Hu Jintao.
Geely in August decided not to proceed with a proposed placing and cash injection of £74million, or 70p a share, which would have given it a controlling 51per cent shareholding.
It now holds all the aces and is able to return with an offer at a much-reduced price which other major shareholders of Manganese Bronze are happy to say yes to.
The plan is apparently for Geely to keep MB's quote on the London Stock Exchange and to invest millions in the group's Coventry site, which has produced more than 100,000 black cabs over the past 45 years. Annual production has averaged between 2000 and 2500 units per year through the past decade.
Manganese Bronze incurred a £7.3million loss in 2009, a year dominated by weak UK volumes and lower margins which came under relentless pressure. But the group did start production of the TX4 cab in China at its joint venture, LTI Shanghai, and this has proved highly profitable.
Manganese Bronze has been in reverse for too long and with Chinese cash it should now be able to quickly return to profit and get the share price back trading above £1.
Profit-taking ahead of today's Comprehensive-Spending Review, and news of a surprise rise in Chinese interest rates for the first time in three years to curb domestic inflation, dragged the Footsie 38.63 points lower to 5703.89.
Source; http://www.dailymail.co.uk/money/articl ... ds-newsxml
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