Business / Companies

Manganese Bronze to seek funds from China's Geely

(Agencies) Updated: 2012-10-16 16:21

Manganese Bronze Holdings Plc is in talks with China's Geely Automobile Holdings Ltd to raise additional funds, according to a company spokesman, as the struggling maker of London's iconic taxis seeks a lifeline following a recall that cast doubt on its financial position.

The Sunday Times reported that executives from Geely, which owns a 20 percent stake in Manganese Bronze, were set to fly into Britain on Monday for emergency talks that may lead to a bailout of the Coventry-based company.

"Whether they are meeting in Coventry or in London I'm unaware, but they are meeting today," a Manganese Bronze spokesman told Reuters on Monday.

He declined to specify what Geely might get in return for throwing Manganese Bronze a lifeline but said the Chinese company wouldn't necessarily take a higher stake in Manganese Bronze in exchange for the funding.

"A lot of options, as you imagine, would be discussed and we can't be more specific at this stage," the spokesman said.

Earlier on Monday, a senior executive at Geely said he was unaware of talks on a possible cash infusion into Manganese Bronze.

Geely, whose parent company also owns Swedish car maker Volvo, now holds roughly 20 percent of Manganese Bronze, worth 610,000 pounds ($981,300), according to Reuters calculations based on the British company's closing price of 10 pence per share on Oct 11, its last trading day.

Manganese Bronze, which has been reporting losses since 2008, suspended trading in its shares on Friday, saying its financial position was unclear after it discovered a safety defect in its new TX4 model that led to a recall and halt in sales.

Friday's news of the recall is the latest in a spate of issues that have plagued the taxi maker at a time when rival Eco City Vehicles, which sells the Mercedes Vito taxi, has been gaining market share.

In August, the company disclosed that a combination of system and procedural errors had led to a 3.9 million pound understatement of historical losses going back several years.

Last month, the company said losses for the first half had widened and that it would not return to profit in the second half.

Manganese Bronze's shares had lost more than two-thirds of their value since the beginning of the year to October 11, the last trading day before the stock was suspended.

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