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Sale of van maker LDV is agreed Sale of van maker LDV is agreed
(21 minutes later)
The sale of Birmingham-based van maker LDV to Malaysian firm Weststar has been agreed, a company spokesman has said.The sale of Birmingham-based van maker LDV to Malaysian firm Weststar has been agreed, a company spokesman has said.
LDV marketing director Guy Jones said the deal would secure production in Birmingham, although he could not guarantee all jobs would be saved.LDV marketing director Guy Jones said the deal would secure production in Birmingham, although he could not guarantee all jobs would be saved.
He added the deal would take another couple of weeks to finalise and no date had been set for production to restart. The UK government will provide a £5m four-week bridging loan to allow time for the takeover to be completed.
Moves to put LDV into administration were adjourned for a week at a court hearing earlier.Moves to put LDV into administration were adjourned for a week at a court hearing earlier.
The UK government will provide a £5m four-week bridging loan to allow time for the takeover by the Malaysian firm to be completed. Mr Jones said the deal would take another couple of weeks to finalise and no date had been set for production to restart.
'Significant development''Significant development'
We cannot stand here today and guarantee the jobs, clearly the market is going to do that Guy Jones, LDV marketing directorWe cannot stand here today and guarantee the jobs, clearly the market is going to do that Guy Jones, LDV marketing director
LDV had originally been due to go into administration at a hearing on Wednesday, but this was was pushed back to 13 May. LDV had been due to go into administration at a hearing on Wednesday, but the hearing was pushed back to 13 May.
A court hearing was told that LDV's Russian owner Gaz had sold its stake in the firm to Weststar.A court hearing was told that LDV's Russian owner Gaz had sold its stake in the firm to Weststar.
LDV's Mr Jones said the moves were "a significant development for LDV and a major step towards an exciting new future for the company".LDV's Mr Jones said the moves were "a significant development for LDV and a major step towards an exciting new future for the company".
However, he added: "We cannot stand here today and guarantee the jobs, clearly the market is going to do that."However, he added: "We cannot stand here today and guarantee the jobs, clearly the market is going to do that."
If LDV had gone into administration, it could have led to 850 workers being made redundant and thousands working at other companies could also have lost their jobs. LDV employs 850 workers and is also a key customer for many suppliers. It employs 1,200 people in dealerships.
We are delighted at the government's backing for this company Tony Woodley, Unite unionWe are delighted at the government's backing for this company Tony Woodley, Unite union
The chief executive of the Society of Motor Manufacturers and Traders, Paul Everitt, said the rescue deal was a vote of confidence in the industry.The chief executive of the Society of Motor Manufacturers and Traders, Paul Everitt, said the rescue deal was a vote of confidence in the industry.
"I think it does signal that there are now investors out there taking a longer term view and they see the UK motor industry as being a good investment - an industry that has a strong future, particularly one that is already ahead and embracing the low carbon agenda," he said. "I think it does signal that there are now investors out there taking a longer term view and they see the UK motor industry as being a good investment - an industry that has a strong future," he said.
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Ex-LDV worker on company's problemsEx-LDV worker on company's problems
The government has made it clear the £5m aid is a one-off bridging loan which cannot be extended. The government has made it clear the £5m is a one-off bridging loan that cannot be extended.
Hopeful sign The LDV plant has been at a near-standstill since before Christmas.
The deal is set to bring some rare good news for the beleaguered motor industry, which has been battered by the recession.
WHO IS WESTSTAR? Privately-owned Malaysian company, founded in 2003Runs Honda car dealerships across Malaysia Has been selling LDV's Maxus van in south east Asia and the Middle East since 2007Employs about 200 staff in MalaysiaWHO IS WESTSTAR? Privately-owned Malaysian company, founded in 2003Runs Honda car dealerships across Malaysia Has been selling LDV's Maxus van in south east Asia and the Middle East since 2007Employs about 200 staff in Malaysia
The Birmingham-based business and plant has been at a near standstill since before Christmas. On Tuesday, Business Minister Ian Pearson said: "Whilst completion of the deal is not certain, it would have been irresponsible of the government not to support it going forward."
About 800 people are employed at LDV's Birmingham factory and about 1,200 people employed in dealerships. It is understood LDV and Weststar had reached a deal earlier in the week, but that it relied on the government financing.
On Tuesday, Business Minister Ian Pearson had said: "Whilst completion of the deal is not certain, it would have been irresponsible of the government not to support it going forward."
It is understood LDV and Weststar had reached a deal earlier in the week, but that it relied on the short-term UK government financing.
'Long way to go''Long way to go'
Following the news of the government loan, Tony Woodley, joint general secretary of trade union Unite, said it was "delighted at the government's backing for this company". Following the news of the government loan, Tony Woodley, joint general secretary of trade union Unite, said he was "delighted at the government's backing for this company".
"There's a long way to go yet, but now thoughts can 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," he said."There's a long way to go yet, but now thoughts can 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," he said.
In February, LDV asked the government for a bridging loan because it was "literally running out of cash".In February, LDV asked the government for a bridging loan because it was "literally running out of cash".
At the time the government said the taxpayer could not be expected to pay for the company's losses, but that talks with LDV were "ongoing and regular".At the time the government said the taxpayer could not be expected to pay for the company's losses, but that talks with LDV were "ongoing and regular".
LDV, which was put up for sale by its Russian owner Gaz late last year, has a long-term association with Weststar making LDV commercial vehicles in Malaysia.LDV, which was put up for sale by its Russian owner Gaz late last year, has a long-term association with Weststar making LDV commercial vehicles in Malaysia.
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