Bridging the gap

1 min read

The government has confirmed a £5m bridging loan to keep LDV afloat during its acquisition by Malaysian group, Weststar.

The four-week loan has been made available to improve the prospects of the company during its sale; however, the government has made it clear that this is a one-off financing agreement that cannot be extended.

In a statement, the management team at LDV said: ‘We appreciate that this is a difficult time for the government, but this support allows time for negotiations to be concluded to secure thousands of British jobs, when the alternative would almost certainly have been the loss of them all.’

LDV employed just fewer than 1,000 people last year, but was forced to make 95 redundant and lay-off a further 700 following difficult market conditions. Under these circumstances the company filed for administration last month, however, its application has since been delayed until 13 May when the case to continue the business will be presented.

LDV added: ‘It must be clarified at this point that while a sale has been agreed, it will take another few weeks to be completed and the loan from the government is to enable the business to continue operating while this process takes place.

‘We need continued support from our employees, dealers and suppliers over this period to finalise this process and restart production and sales of MAXUS commercial vehicles. This is clearly a significant development for LDV and a major step towards an exciting new future but there are still major steps to be competed over the next few weeks.’

Business minister, Ian Pearson, said: ‘Weststar's proposed purchase of LDV offers the only credible chance of keeping this manufacturing plant in the UK. While completion of the deal is not certain, it would have been irresponsible of the government not to support it going forward.’

Echoing Pearson’s positive sentiments, Tony Woodley, Unite’s joint general secretary, said: ‘We are delighted at the government’s backing for this company.

‘At times, it has been like pulling teeth trying to secure the small measure of assistance needed to save this plant, but with the Prime Minister's intervention things have got moving. There's a long way to go yet but thoughts can now turn to building a serious and successful future for this company, and to getting these men and women, who have not built a vehicle in months, back to work.’