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Van firm LDV into administration Van firm LDV into administration
(about 3 hours later)
Vanmaker LDV has been placed into administration by a court, threatening up to 850 jobs and thousands more in the supply chain.Vanmaker LDV has been placed into administration by a court, threatening up to 850 jobs and thousands more in the supply chain.
Attempts to sell Birmingham-based LDV as a going concern have failed.Attempts to sell Birmingham-based LDV as a going concern have failed.
Talks with one potential buyer, the Malaysian firm Weststar, broke down at the last minute last weekend, leading LDV to apply for administration.Talks with one potential buyer, the Malaysian firm Weststar, broke down at the last minute last weekend, leading LDV to apply for administration.
It is feared that any buyer would take machinery abroad and continue making vans overseasIt is feared that any buyer would take machinery abroad and continue making vans overseas
Such a move would end decades of production at the Washwood Heath site.
LDV managers and workers were angered last week when they were forced to cancel a planned lobby of Parliament because of Prime Minister Gordon Brown's cabinet reshuffle.LDV managers and workers were angered last week when they were forced to cancel a planned lobby of Parliament because of Prime Minister Gordon Brown's cabinet reshuffle.
Directors had hoped to persuade the government to agree to a £60m loan to secure the firm, but no ministers were available to meet them.Directors had hoped to persuade the government to agree to a £60m loan to secure the firm, but no ministers were available to meet them.
Near-standstill
The firm claimed the loan would have cost the state much less than the collapse of the business will.The firm claimed the loan would have cost the state much less than the collapse of the business will.
Near-standstill
In addition to the workforce, LDV employs 1,200 people in dealerships and is a major customer for local suppliers.In addition to the workforce, LDV employs 1,200 people in dealerships and is a major customer for local suppliers.
Since 2006 the firm - formerly Leyland DAF Vans - has been owned by Russia's Gaz Group, controlled by Oleg Deripaska.Since 2006 the firm - formerly Leyland DAF Vans - has been owned by Russia's Gaz Group, controlled by Oleg Deripaska.
The Washwood Heath plant has been at a near-standstill since before the end of 2008 during the search for a new owner. A Gaz spokesman said it was "a sad day for the LDV workforce, suppliers and British manufacturing".
LDV's Washwood Heath plant has been at a near-standstill since before the end of 2008 during the search for a new owner.
"The management team have worked exceptionally hard over the past few weeks and months but, despite every effort made around the globe, they've been unable to obtain the required funding from the banking system," said the firm's marketing manager, Guy Jones.
"Like much of industry, its access to this working capital remains an issue, which will go on to cause further job losses if not addressed."
He added he hoped that potential buyers would recognise "potential" in the firm and insisted there was the opportunity for "a bright future".
Administration benefits
Weststar had agreed a deal to acquire the company from its Russian owners, with the aim of restarting production in July.Weststar had agreed a deal to acquire the company from its Russian owners, with the aim of restarting production in July.
The government pledged a £5m four-week loan until the deal was sealed, after the firm said it intended to maintain production at the Birmingham plant and expand manufacturing in Malaysia.The government pledged a £5m four-week loan until the deal was sealed, after the firm said it intended to maintain production at the Birmingham plant and expand manufacturing in Malaysia.
However, Weststar pulled out at the last minute. However, Weststar pulled out of the takeover last week.
BBC business reporter John Moylan said: "This signalled the end of the road for the company which was once part of British Leyland." It has not commented on reports that it planned to swoop for LDV once it was in administration - a move which would mean it took on the firm with fewer debts.
"The benefit of buying a company out of administration is that the buyer is not taking on any liabilities and is able to only take the 'good bits'," said Alan Tomlinson, partner of licensed insolvency practitioner Tomlinsons.