Administrators appointed to maker of London taxis
on 22/10/2012 14:02:16
Coventry-based Manganese Bronze was reportedly in talks with Chinese private automaker Geely, which owns a 20% stake in the firm, about a £15m (€18.4m) loan.
But the group, which recently recalled 500 black cabs due to a steering box fault, said it had been unable to secure funding with various parties and will bring in administrators.
Manganese, which employs nearly 300 staff and traces its roots to the 19th century as a maker of ship propellers, recently reported wider half-year losses of £3.6m (€4.4m).
Earlier this month, Manganese Bronze said it had discovered a defect with new steering boxes in its TX4 models, which were introduced in production at its Coventry factory in late February.
Manganese said it discovered the fault after two cab drivers reported problems with steering, but stressed there had been no crashes or injuries as a result.
It warned that the recall and sales suspension would have a "material and detrimental" impact on its cashflow and said it was looking at options for the firm.
The group is urgently contacting drivers of the 400 affected vehicles to make sure they are taken off the road.
In its statement today, Manganese added that a "speedy resolution" of the product recall remained a top priority for the group, which will continue throughout the administration process.
It said it "remains hopeful that the fundamental strengths of the company, the TX4 model and its global reputation will provide the platform for a successful business in the future".
Manganese has been loss-making for the past four years as its London Taxi arm has been hit by a consumer spending slowdown and increased rivalry from competitors, such as Eco City vehicles.
The group's London Taxi Company division makes about 2,700 cabs a year and has produced more than 100,000 since it started in 1948.
Its newest model, the TX4, was launched in October 2006.