LDV close to collapse

Van maker LDV is on the brink of laying off 900 employees and going into administration after plans for a management buyout fell through.

The Birmingham-based group, which is owned by Russian engineering company Gaz, had hoped to stay afloat after it applied for loan of more than £20m from the UK government.

Refusal of the loan application has led the group to set a 6 May deadline to secure new funding before it goes into administration.

In a letter to employees, the company said: ‘During the past few weeks, the global economic crisis has forced us to operate in exceptional conditions and we cannot continue in this position without funding indefinitely.

‘We are still working with potential overseas investors who want to keep production in Birmingham, but they, like many people at this time, are finding it difficult to secure the necessary funds. We must now inform you that the deterioration in the position of the business has forced the directors to apply for administration.’